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1803.March ISand SO
KAPOOR SAIBO v. MUDALIHAMI BAAS.
D. C., Kandy, 14,387.
Prescription—Claim on an account stated and acknowledged—Ordinance No. SS
of 1871, ss. 8 and 18—“ Acknowledgment or promise by words only
An account stated maybe settledorally; but an acknowledgmentby
words only is insufficientto preventan action formoneydue uponan
account stated and thus acknowledged being barred under section 9 of theOrdinance No. 29 of 1871.
The plaintiff and defendant having had dealings with each other upto 23rd August, 1897, the defendant orally acknowledged on 19tbAugust, 1898, the accountstated byplaintiff, whichshowedthe debtsof
the defendant and occasional payments made byhim' inreductionof
them. The account did not show mutual debts and mutual paymentsby way of set-off, and a conversion of the set-off into payments.
The plaintiff came into Court (with his claim for money due upon anaccount stated) on 1st February, 1901.
Held, that plaintiff could not maintain his action, because theacknowledgment of the defendant was a verbal one expressly declaredinsufficient by section 18 of the Ordinance No. 22 of 1871.
Ashby v. James (11 M. & W. 544), explained and distinguished, as alsoFernando v. Puncha (1 8. C. B. 1S3).
HE plaintiff claimed from the defendant the sum of Rs. 229 on
an account alleged to have been stated and acknowledged on19th August, 1898, and Rs. 82.81 as the value of goods sold anddelivered between 27th January and 5th March, 1900. The issuesagreed to between the parties at the trial were: —
Whether there was an accounting between the parties on19th August, 1898;
Whether a sum of Rs. 229.24 was then found to be due bydefendant to plaintiff; and
Whether the plaintiff thereafter sold and delivered goods todefendant as specified in the account filed with the plaint?
The District Judge delivered the following judgment: —
“ The plaintiff has sought to establish the accounting by paroleevidence. That evidence cannot be accepted as proving theaccounting. See D. C., Kandy, 90,241 (5 S. C. C. 169), and C. R.,Kandy, 425 (1 8. C. R. 123). I therefore answer the first and secondissues in the negative.
“ The rest of the claim is for goods sold and delivered between27th January and 5th March, 1900. This action was instituted on1st February, 1901. The items are all entered in order in theplaintiff’s daybook, a bound paper book. I see no reason to doubtthe bond fides of that claim. The defendant made payments on
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account aggregating Rs. 60 on the 27th January, 15th February, and9th August, 1900. The balance due is Rs. 82.76.
" I give the plaintiff judgment for Rs. 82.76, with interest thereonat the rate of 9 per cent, per annum from this date till payment,with costs of an action in the Court of Requests, and at the sametime order him to pay to the defendant the amount of the costswhich he has been made to incur by the action-being brought inthis Court.”
The plaintiff appealed. The case was argued on 12th March,1903.
Van Langenberg, for appellant.
Bawa, for respondent.
Cur. adv. vult.
20th March, 1903. Monckeiff, J.—
The following dates are material:—23rd August, 1897, lastdealing between the parties on the old account; 19th August, 1898,alleged account stated; 27th January, 1900, first dealing on the newaccount; 1st February, 1901, action instituted.
The plaintiff sued for goods sold and delivered and on an accountstated. For goods sold and delivered between 27th January and5th March, 1900, he recovered Rs. 82.76. So far the Judge’sdecision may be accepted.
The rest of the claim was on an' account stated for goods suppliedon or before the 23rd August, 1897. If the claim had been putforward as for goods sold and delivered, it would have beenprescribed, because the action was not instituted until the 1stFebruary, 1901; but it is said to be taken out of the Ordinanceby an account alleged to have been stated between the partieson the 19th August, 1898. If an account was so stated, this partof the claim would, it is said, fall within section 8 of the Prescrip-tion Ordinance, No. 22 of 1871, and could only be prescribed aftera delay of three years. On the stating of an account a new anddistinct cause of action arises; the plaintiff is said to be thus relievedfrom proof of the materials on which the account is stated; andin fact it is supposed that the consideration for the account is thesetting off of liabilities on each side, and the relief from the neces-sity for retaining proof of them. The advantage of a definiteagreement as to the sum due is sufficient consideration.
This account stated was oral. It is none the less an accountstated, if proved. “ But,” says the defendant, “ the account stated,although good in law, cannot be used to defeat the terms of section9 of the Prescription Ordinance. Even if I did owe the plaintiffmoney for goods sold and delivered, prescription has run, and it is
March 12and 20.
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March Mand 20.
not to be defeated by evidence of an oral acknowledgment orpromise on my part.” He urges that, by section 18 of the Ordi-nance—in any of the forms of action referred to in sections 6 to 12—no acknowledgment or promise by words only shall be deemedevidence of a new or continuing contract, whereby to take the caseout of the operation of the enactments contained in the saidsections or any of them, or to deprive any party of the benefitthereof, unless such acknowledgment shall be made or containedby or in some writing to be (?)* signed by the party chargeable, orsome agent duly authorized to enter into such contract on hisbehalf.
If this claim is brought on a valid account stated, the plaintiff isnot suing for goods sold and. delivered, nor in a sense possiblyupon any acknowledgment of liability for, or promise to pay forgoods sold or delivered, nor upon a continuing contract. He issuing upon a new contract, upon a new cause of action which isindependent of his liability to pay for goods sold and delivered.Now, this new contract is not to be proved by an ‘‘ acknowledgmentor promise by words only.” That is admitted, it cannot be denied;but it is said that the ‘‘ acknowledgment or promise ” in theOrdinance refers to cases where there is only one side of theaccount.
It was admitted in Highmore v. Primrose (5 M. &67),
Laycook v. Pickles (4 B. & 8. 506), and other cases, that an accountshowing one item might be an account stated; and it would seemto have been thought by some Judges that in such a case, andeven when the debtor is given credit for payments on account,the account verbally stated is a promise or acknowledgment bywords only within the Ordinance, although the case is differentwhere cross items appear and are struck off until a balanceis found. That seems to be the view of the authorities taken byClarence, J., in Fernando v. Puncha (1 S. C. R. 123). See alsoFernando v. Apponsu Baas (5 8. C. G. 169). It is flatly laiddown in Ashby v. James (1843), 11 M. & W. 543, that LordTenterden’s Act (9 Geo. 4. C. 14 S. 1) does not apply to the caseof an account stated, where there are items on both sides. Thewords of our section are identical with those in Lord Tenterden’sAct. No reason is given for this opinion, and I confess I find itdifficult to say that on oral account stated upon cross-transactionsIs not a promise or acknowledgment within the terms of ourOrdinance. It would appear however that, although in this casecredit was given to the defendant for payments, there were no
• Th« words “ to be ” in the Ordinance seems to be a misprint for “ duly.”—F,d.
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cross-dealings between the parties. The matter therefore . doesnot fall within the case contemplated in Ashby v. James. I agreewith the District Judge, and think that the appeal should bedismissed with costs.
I agree. The plaintiff in this case seeks to evade the effect ofsection 13 of the Prescription Ordinance by alleging an oralagreement to pay a balance found to be due on the 19th August,1898, as an account stated, giving a fresh cause of action arisingon that date, and so enabling him to recover a debt admitted in.that account stated, which arose more than a year before action'brought.
Admitting that an account stated may be settled orally, andthat an account stated gives rise to a distinct cause of action, itremains to be considered whether such an account stated as wehave here is anything more than “ an acknowledgment or promiseby words only,” such as by section 13 of our Ordinance adoptedfrom a section of Lord Tenterden’s Act, is expressly declared to beinsufficient to prevent an action being statute barred.
Now, the only case cited to us in support of the contention thatsuch an acknowledgment is not one within the meaning-'of thesection is Ashby v. James (11 M. & W. 544). That- howeverappears to me to be a totally different case from the present.There, there were mutual dealings and mutual debts, and -abalance was struck of -£12 9s. 6d. in the plaintiff’s favour.
In. this case the debt’s were all on defendant’s side; therewere no mutual dealings, but the defendant’s liabilities werereduced by occasional repayments up to 23rd August, 1897, and onthe 19th August, 1898, a certain amount of debt was found tobe outstanding. The ratio decidendi in Ashby. _.v. James (perAlderson, B.) was that the striking of a balance, where there aremutual debts, amounts to a payment at such time of such debts, andso there is a part payment to keep alive the right -to sue for abalance. That is quite intelligible, but it does not apply here.There is here no “conversion of the set-off into payments ” asthere is no real set-off, but only payments more than a yearbefore by the defendant from time to time of what he -owed, anda striking off of Bs. 155 owed by one Sayanhamy. It is really anaccount stated on one side only. I agree with the view ofClarence, J., in Fernando v. Puncha (1 S. C. R. 123). Whathappened on the 19th August, 1898, was a mere verbal acknowledg-ment expressly declared by section 13 of the PrescriptionOrdinance to be insufficient to prevent an action being statute
barred, and this appeal consequently Mis.