Husseniya v. Jayawardana
v.JAYAWARDENA AND ANOTHER
WEERARATNE, J., SHARVANANDA. J. AND WANASUNDERA, J.
S. C. No. 61/79—C.A. 493/78 (F)-D.C. GALLE 8307/L.
Landlord and tenant—Action for ejectment— Tenant in arrears of rent—Payment bysub-tenant— Need for such payments to be in name of tenant or on his behalf if arrearsto be discharged—Failure of sub-tenant to establish this —Plaintiff entitled to judgment.
Rent Act, No. 7 of 1972, section 21—Payment of rents to authorised person-Paymentsmust be in name of or on behalf of tenant.
Under our law a stranger to a contract acting without authority may validlydischarge the debtor's obligation provided the payment is made in the name of thedebtor and for his benefit. In the present case, however, the 2nd defendant who was asub-tenant of the 1st defendant had failed to establish that he deposited rents in thename of the 1st defendant or on his behalf and the evidence in fact pointed to thedeposit having been made by the 2nd defendant in his own name. Such a deposit was noteffective to discharge the 1st defendant's liability for arrears of rent to the landlord.
Further, the provisions of section 21 of Rent Act, No. 7 of 1972, having beeninvoked on behalf of the 2nd defendant, inasmuch as the payments were made to theMunicipality, the 2nd defendant had to establish that he had so paid the rents in thename of or on behalf of the tenant (1st defendant) to the Municipality, which in termsof the section was a statutory agent of the landlord. The section only contemplates thedeposit of rent being made by the tenant and the deposit made by the 2nd defendantdid not attract the benefit of the provisions of section 21.
Accordingly, the finding that the 1st defendant was in arrears of rent must be upheldand judgment be entered for the plaintiff.
Per Sharvananda, J.
“On the facts it would appear the allegation of collusion between the plaintiff and the1st defendant made by the 2nd defendant is not without substance. There was no goodreason for the 1st defendant's failure to pay rent from February, 1972. But suchallegation has no relevance to the question of ejectment of the sub-tenant if the tenant,
in fact, had fallen into arrears of rent as prescribed by the Rent ActIf
the tenant in collusion with the landlord or otherwise faHs to pay rent and, in fact,falls into arrears of rent, the sub-tenant’s right of occupation is jeopardised. His rightto occupation is dependent on the tenant's rij^it to occupation and he is liable toeviction if the statutory protection given by the Rent Act to a tenant and of which asub-tenant may avail himself ceases to be available to him by reason of fraud orcollusion oh the part of the tenant."
Cnees referred to
(11 Bousfietd v. Divisional Council of Stutterheim. (1920) 19 S.C. 74.
Sri Lanka Law deports
(1981) 1 S.L.R.
Commissioner for Inland Revenue v. Vaster. (1959) 1 S.A.L.R. 452.
Ibrahim Saibo v. Mansoor, (1953) 54 N.L.R. 217; 48 C.L.W. 35.
A. Mampitiya, with N. R. M. Daluwatte. for the plaintiff-respondent-appellant.
At S. A. Hassan. with Miss Sheila Jayatillake. for the 2nd defendant-appellaot-respondent.
Cur. adv. vult.
March 27. 1981.
This is an appeal from the judgment of the Court of Appealallowing the appeal of the 2nd defendant-respondent and dismissingthe plaintiff-appellant's action with costs.
The plaintiff-appellant sued the 1st and 2nd defendant-respondents for ejectment from premises Nos. 5, 7 and 9, WardStreet, Galle, on the ground that the 1st defendant, being thetenant of the plaintiff, was in arrears of rent from 1.2.72 up tothe date of the plaint, viz., 21.5.74, and also on the ground thatthe 1st defendant had without her consent sub-let the premises tothe 2nd defendant.
The 1st defendant denied that he was in arrears of rent andprayed for the dismissal of the plaintiff's action.
The 2nd defendant filed answer denying that he was a sub-tenant of the 1st defendant and claimed that he was in fact thetenant of the premises under the plaintiff, that he had offered therent to the plaintiff in February, 1972, but as she refused toaccept the rent, all the rent from February, 1972 had beendeposited by him in the Municipality of Galle. He further pleadedthat this was an action instituted by the plaintiff in collusion withthe 1st defendant in order to eject him. According to him, the 1stdefendant was permitted by his predecessors to use a portion ofthe premises in suit and was a licensee under him.
The position taken up by the 2nd defendant in the pleadingsand in his evidence was that his predecessors, WilmotJayawardena and after him Hinni Nona, were tenants of theplaintiff and that on the death of Hinni Nona, his mother, on8th February, 1972, he succeeded her as tenant of theplaintiff and in such capacity offered the rent for February,
SCHusseniya v. Jayawardena (Sharvananda, J.)35
1972 to the plaintiff, but she wrongfully refused to accept therent from him.
The main issues on which the case proceeded to trial were:
Who was the tenant of the premises—the 1st defendantor the 2nd defendant?
If the 1st defendant was the tenant, whether he was inarrears of rent from February, 1972; and
M Whether the 1st defendant had sub-let the premises tothe 2nd defendant without the written consent of theplaintiff.
After trial, the trial Judge entered judgment for the plaintiff,holding that the 1st defendant was, in fact, the tenant and thathe had wrongfully sub-let the premises to the 2nd defendant,and further that the 1st defendant was in arrears of rent aspleaded in the plaint.
The 2nd defendant thereupon appealed to the Court of Appeal,and the Court of Appeal by its judgment dated 26.11.79 whileaffirming the finding of the District Judge that the 2nd defendant'spredecessor Hinni Nona was in occupation of the premises assub-tenant thereof and that on her death on 8th February, 1972,the 2nd defendant succeeded her as sub-tenant under the 1stdefendant, proceeded to hold that the sub-letting had takenplace prior to the date of commencement of the Rent Act, No. 7of 1972 (i.e., prior to 1.3.72) and hence section 10(7) of theRent Act protected such sub-letting, so long as the 2nddefendant continued to be the sub-tenant of the premises orpart thereof. The Court further held that since the 2nddefendant had deposited the rent from 1.3.72 to 31.8.72 andfurther rents up to 31.3.75 in the Municipality, such depositwas a valid payment of rent and that hence the 1st defendantwas not in arrears of rent when the plaintiff filed this action andconsequently both the 1st and 2nd defendants were entitled tothe protection of the Rent Act. It allowed the appeal of the2nd defendant and dismissed the plaintiff's action with costs.
On the appeal before us, the concurrent finding that the 1stdefendant was the tenant of the premises and the 2nd defendantwas his sub-tenant was not canvassed and was accepted by counsel
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for the 2nd defendant-respondent. It was also common groundthat the 2nd defendant had, in fact, deposited on 29th September,1972, the rents for these premises for the period 1.3.72 to 31.8.72and thereafter for the subsequent period up to 31.3.75 in theMunicipality in favour of the plaintiff. The sole questioncanvassed before us was whether such payment by the 2nddefendant constituted valid payment of rent to the plaintiff soas to wipe out the 1st defendant's arrears of rent. The findingof the trial Judge that the 1st defendant had himself failed to payany rent for the month of February, 1972 and thereafter was notquestioned and was accepted by all parties.
In holding that the deposit of the rent to the credit of theplaintiff for the relevant period by the 2nd defendant was avalid payment which accrued to the benefit of the 1st defendantthe Court of Appeal fell into the fundamental error of assumingthat the Rent Clerk of the Galle Municipal Council had statedin his evidence that the rents for these premises for the period1.3.72 to 31.8.72 had been paid by the 2nd defendant "in thename of the 1st defendant". This assumption is not borne outby the evidence of that witness. According to the record, theClerk had only stated: "A Sum of Rs. 540 being rent from March,1972 to August, 1972, has been paid on 29.9.72 by NissankaJayawardena (the 2nd defendant). This money has been paid inthe name of Mohamed Ismail Asma Husseniya (plaintiff). Moneyhas been paid up to March, 1975 at the rate of Rs. 90 a month".Not even the 2nd defendant in his evidence has stated that hedeposited the rent in the Municipality in the name of the 1stdefendant. It is not conceivable that the 2nd defendant wouldhave made the deposit of rent in the Municipality in the name ofthe 1st defendant, as, according to him, during the relevant periodhe was the tenant of the premises and the 1st defendant was hislicensee and hence, in the circumstances, it was not at all likelythat he would have paid the rents in the name of the 1st defendant.In fact, in re-examination he stated: "On 8.2.72 I paid the moneydirect to the plaintiff. When I paid the money for the month ofMarch, the same was refused. Thereafter I deposited the money inthe Municipal Council". The conclusion is irresistible that the 2nddefendant did not make the deposit in the Municipality in thename of the 1st defendant, but made it in his own name in thepurported discharge of his obligation qua tenant. The burden wason the 2nd defendant to establish that the deposit made by himserved to wipe out the 1st defendant's arrears of rent. To succeed
Husseniyav. Jayawardena fSharvananda, JJ
in that defence, he had to prove that the deposit made by himwas made in the name of the 1st defendant or on his behalf. Hehas failed to do so.
In view of its unwarranted assumption that the; deposit of rentwas made by the 2nd defendant in the name of the 1st defendant,the Court of Appeal came to the wrong conclusion that suchpayment went to discharge the obligations of the 1st defendant andthat hence the 1st defendant was not in arrears of rent.
The person who ought ordinarily to render performance is adebtor. He may also render performance through an agent actingon his behalf. Under the Roman Dutch Law, although the debtoror the agent is the proper person to perform the contract, he isnot the only person entitled to do so. Any person interested inthe payment of the debi can discharge the obligation. A sub-tenant could make payment of the rent due from a tenant to alandlord if such payment was for the purpose of preventing hisown goods from being seized under the landlord's tacit hypothec.
"A sub-tenant is entitled to pay the landlord the rent due tohim by the tenant either in order to free his (the sub-tenant's)goods from the landlord's tacit hypothec, or acting as negotiorumgestor for the tenant." (Voet 19.2.21 Wi/le Landlord and Tenant,
utu l.tjuiOii ni !U9/-
"The Civil Law, differing in that respect from the English Law,allows a stranger to a contract to carry out his terms and toextinguish the obligation of the debtor irrespective of whether thedebtor is ignorant of the payment or unwilling that it should bemade by a third party." (Wessels Law of Contracts, 1937 Edition,Vol. I, paragraph 2130 at p. 658). However, in paragraph 2134,Wessels states:
" For such payment to be effective, it must however be quiteclear that the third party makes the payment for the benefit ofthe debtor."
(Van Leeuwen, Cens. For., 184.108.40.206)
In book 46.3.7 Voet states the law:
"Although payment to my creditor's creditor will not be validwithout my creditor's consent except in so far as my actions on
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his behalf have been for his benefit though unknown to him."
Thus, according to Voet, the payment to operate as a discharge ofthe debt due to the landlord must be for the benefit of the landlordand must purport to be on his behalf.
Pothier, in his Law of Obligations, states:
"Section 463: It is not essential to the validity of the paymentthat it be made by the debtor or any person authorised by him;it may be made by any person without such authority, or evenin opposition to his orders, provided it is made in his name andin his discharge and the property is effectually transferred;it is a valid payment, it induces the extinction of the obligation
and the debtor is discharged even against his will
But if the payment was not made in the name of the real debtor,it will not be valid: if a man paid in his own name a sum ofmoney, believing that he was the debtor when in fact it was notdue from him but from some other person, this payment wouldnot extinguish the obligation of the real debtor."
In Bousfield v. Divisional Council of Stutterheim (1) at 71,De Villiers, C.J. accepted the law as laid down by Voet and Pothierthat payments made by a stranger to a contract are valid anddischarge the obligation, but he added: "It is necessary howeverthat the tender made by a perfect stranger should be made in thename of the debtor", and held that if a tender is made by astranger in his own name, the creditor may refuse to acceptpayment.
Thus it would appear that under our law a stranger to a contractacting without authority, may validly discharge the debtor'sobligation, provided the payment is made in the name of thedebtor and for his benefit, in which event the debtor is dischargedeven against his will. (Commissioner for Inland Revenue v.Vesser (2) at 458 (A.D.)) The payment must however be made tothe landlord or his agent.
In this case the 2nd defendant has failed to establish that hedeposited the money in the name of the 1st defendant or on hisbehalf. On the other hand, the evidence points to the deposithaving been made by the 2nd defendant in his own name. Hencesuch deposit is not effective to discharge the 1st defendant's
Husseniya v. Jayawardena (Sharvananda, J.)
liability for arrears of rent. Further, the payment was not made tothe plaintiff or to any agent appointed by him; the payment wasto the Municipality.
Counsel for the 2nd defendant referred to section 21 of theRent Act, No. 7 of 1972, and claimed that payment in terms ofsection 21 had been made to the Municipality, which has beenmade the statutory agent of the landlord and that such paymentis deemed to be payment to the plaintiff, which redounded tothe benefit of the 1st defendant-tenant. Section 21 reads asfollows;
‘‘21(1) The tenant of any premises may pay the rent of thepremises to the authorised person instead of the landlord.
Where any payment of rent of any premises is made onany day in accordance with the provisions of sub-section (1), itshall be deemed to be a payment received on that day by thelandlord of the premises from the tenant thereof.
In this section 'authorized person' with referenceto any premises means the Mayor or a Chairman of the LocalAuthority within, whose administrative limits the premisesare situated."
The principle of the Roman Dutch Law set out above appliesonly if the rent has been paid by the sub-tenant in the name oron behalf of the tenant to the landlord or his agent. In this casethe rent has not been paid by the 2nd defendant to the plaintiff-landlord in terms of the Roman Dutch Law. Section 21 of theRent Act has appointed the Local Authority to be the statutoryagent of the landlord for the due payment of rent. For the 2nddefendant to avail himself of the benefit of that section, he shouldsatisfy all the conditions prescribed for the deeming-section (21
) to come into operation. Section 21 contemplates the depositof rent to be made by the tenant. Admittedly, the deposit of renthas not been made to the 'authorised person' by the 1st defendantor anyone authorised by him. In the circumstances, the depositmade by the 2nd defendant in the Municipality without theauthority of the 1st defendant does not attract the benefit of the
provisions of section 21 and the 2nd defendant cannot claim thesalvation of section 21.
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For the above reasons, I cannot agree with the judgment of theCourt of Appeal that the deposit made by the 2nd defendantcomplies with the requirement of the Roman Dutch Law or ofsection 21 of the Rent Act.
In view of my above conclusion, it is not necessary to go intothe question whether the sub letting of the premises by the1st defendant to the 2nd defendant took place prior to thecommencement of the Rent Act, No. 7 of 1972, or not.
On the facts it would appear that the allegation of collusionbetween the plaintiff and the 1st defendant made by the 2nddefendant is not without substance. There was no good reason forthe 1st defendant's failure to pay rent from February 1972. Butsuch allegation has no relevance to the question of ejectment ofthe sub-tenant if the tenant, in fact, had fallen into arrears of rentas prescribed by the Rent Act. As was said in Ibrahim Saibo v.Mansoor (3) at 223 D.B., "the position of a monthly sub-tenant
whose immediate landlord is a monthly tenant is precarious
His right to occupation is fragile." If the tenant in
collusion with the landlord or otherwise fails to pay rent and, infact, falls into arrears of rent, the sub tenant's right of occupationis jeopardised. His right to occupation is dependent on the tenant'sright to occupation and he is liable to eviction if the statutoryprotection given by the Rent Act to a tenant and of which a sub-tenant may avail himself ceases to be available to him by reason offraud or collusion on the part of the tenant. I
I allow the appeal of the plaintiff-appellant and set aside thejudgment of the Court of Appeal and restore the judgment of thetrial Judge entering judgment for the plaintiff as prayed for. The2nd defendant will pay the plaintiff-appellant his costs in theCourt of Appeal and in this Court.
WEERARATNE, J.-I agree.
WAN ASUNDER A, J.-I agree.
HUSSENIYA v. JAYAWARDENA AND ANOTHER