MACDONELL C.J.—Nagamuttu 9. Sittambarcrpillai.
1931Present: Macdonell C.J.
NAGAMUTTU v. SITTAMBARAPILLAI.
55^C. B. Mallakam, 5,396.
Agreement—Action for money lent—Oral agreement to possess land in lieu ofinterest—Prescription.
Where in an action for the recovery of money lent the defendant pleadedprescription, an oral agreement to possess land in lieu of interest may beproved for the purpose of averting prescription.
PPEAL from a judgment of the Commissioner of Bequests..Mallakam.
R.' Ramackandram, for plaintiff, appellant.
September 24, 1931. Macdonell C.J. —
In this case the plaintiff-appellant sued the defendant-respondent forthe recovery of Rs. 120 lent to the defendant-respondent in the year 1920.The plaintiff-appellant stated that in August, 1921. the defendant-debtorhad requested him “ to take and enjoy the produce of the land situated,at Siruvilan called Thaduvan in extent 30 lachams varagu culture; withpalmyras and young palmyras, till he pays the said sum of Rs. 120 inlieu of interest, accordingly the plaintiff possessed the said land andenjoyed the produce thereof till February 8, 1930 ”, and it was averred bythe plaintiff-appellant that he had so taken possession and paid himselfthe interest out of the produce up to February, 1928, when the defendantrendered the land so occupied by the plaintiff profitless by cutting andremoving the olas from the palmyra trees. To this the defendant repliedat length, admitting the oral agreement and possession by the plaintiff-appellant thereunder, but stating that the terms of it were -totally differentfrom those averred by the plaintiff-appellant; and he also counterclaimed1under the same oral agreement rent Rs. 70. He further pleaded thatthe claim of the plaintiff was prescribed and his action not maintainablein the absence of a written agreement under Ordinance No. 7 of 1840.The learned Commissioner held in accordance with this plea that theaction was prescribed and dismissed it with costs.
It seems .to me that this appeal must succeed. The plaintiff-appellantis not seeking to set up any contract or agreement for effecting the sale,purchase, transfer, assignment, or mortgage of land, or for establishing anysecurity, interest, or incumbrance affecting land, nor any contract oragreement for the future sale or purchase of land. His case- put shortlyis this. He claims that interest has been paid him for a continuousperiod-so as to defeat prescription, and he simply asks to be allowed tobring proof as to the manner in which that interest has been paid. Soput, and I think .that is the correct way of putting his case, it will be seenthat it has nothing to do with Ordinance No. 7 of 1840,. section 2, at all.In its facts this case does not seem to me distinguishable from Ameresekerev. Ameresekere where money having been lent interest was not actuallypaid but the debtor allowed the creditor to occupy a house of the debtor,the rent for it to be set off against the interest due on the loan; per WoodRenton C.J. " We have here to do, not with a fresh acknowledgment ofindebtedness, but with the question whether there was not such a payment
» J8 N. L. R. SOS.
DKIEBERG J.—King #. Manikam.
of interest as would keep the original debt alive.. I see no reason why theexisrerce of an agreement for payment may not be established by implica-tion from the circumstances of a case.” The present case is stronger forthe appellant, since the agreement and the occupation thereunder areadmitted by the defendant and it is only the terms of that agreement thatare in dispute. There is a succession of cases from Perera v. Fernando',which established that there can be an action based upon use and occupa-tion although the use and occupation were under a verbal agreement,Neither party could sue to enforce that verbal agreement for use andoccupation, but, there having been the use and occupation, certain liabili- .ties, e.g., to pay compensation for .the use and occupation, will arise towhich the Courts will give effect. Kanagaratna v. Banda2 and SinnoAppu v. Appu Sinno3 are later cases to the effect- that an action foruse and occupation on a parol agreement will lie.
1 would also wish to point out this. If the 'judgment now appealedfrom were to stand, the defendant-respondent would be at liberty toobtain judgment for use and occupation by virtue of the verbal agreementwhich the plaintiff-appellant is to be debarred from using as an acknowledg-ment of interest and therefore of the debt upon which interest is said tohave been paid.
The judgment appealed from must be set aside and the case remittedto the learned Commissioner to be heard and determined in the usualcourse. The appellant to have the costs of this appeal, all other costs toabide the. event.
NAGAMUTTU v. SITTAMBARAPILLAY