005-NLR-NLR-V-53-THOMAS-SILVE-Appellant-and-HEMALATHA-HAMINE-Respondent.pdf
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Thomas Silt a t. Hemalatha H amine
Present: Dias S.P.J. and Swan J.
THOMAS SILVA, Appellant, and HEMALATHA HAMINE,
Respondent
S. C. 547—D. C. Ratnapura, 8,701
Assignment of a debt—-Cession of right of action—Effect of such cession—Prescription.
—Addition of party or cause of action—When not permissible.
In an action for the recovery of a debt due on goods sold and cash advanced,it was established that the plaintiff had transferred the debt to his childrenprior to the date of action.
Held, that there had been a cession of the right of action. In such a case,the cedent is deprived of every right of action against the debtor, and thecessionary is the only party entitled to sue.
Held further, (i) that the plaintiff’s children should not be allowed to be addedas parties if, by such addition, the defence of prescription would be defeated.
(ii) that, for the purpose of prescription, an action is deemed to be broughtagainst a new added party on the date he is made defendant.
Perera u. Toussaint {1935) 37 N. L. R. 250, followed.
Velupillai t>. The Chairman, Urban District Council, Jaffna (1936) 39 N. L. R.
. 464, doubted. „
yy PPEAL from a judgment of the District Court, Ratnapura,
U. A. Jayasundera,K.C., with D. Wimalaratne, for the plaintiff
appellant.
N. E. Weerasooria, K.C., with M. D. H. Jayawardene and W. D.Gunasekera, for the defendant respondent.
Giir. adv. vuIt.
SWAN J.—Thomas Silca r. Hemalatha Hamine
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August 4, 1950. Swan J.—
The plaintiff-appellant sued the defendant-respondent for the recoveryof Its. 2,084.44, being the balance due on goods sold and cash advancedt<. the defendant up to. 1st October, 1948. In her answer the defendantstated that she had no dealings With the plaintiff and that the transactionsin question were between one D. S. Abeywardene and the plaintiff.
At the trial, after certain issues had been framed, the plaintiff gaveevidence. In cross-examination the plaintiff admitted that in May,1948, he transferred his business including the book debts to his threechildren. Counsel for the defendant produced a copy of the certificateof registration which showed that on 31st May, 1948, the business nameof M. P. Thomas Silva and Company was duly registered, the names ofthe partners being set out in column 6. The plaintiff's evidence on this-iriint is as follows: —
“ On 31st May, 1948, my business was registered in the names of mysons and myself. (Mr. Advocate Jayawardene produces marked D. 1Business Names Registration Certificate). I was under the impressionthat I was also a partner of this business. I have filed this action jn myprivate capacity as M. P. Thomas Silva. I transferred my businessto this new firm. All that I could claim are debts prior to 31.5.48and that (sic) too I have transferred to the company.”
An effort was made by counsel for the plaintiff to straighten outmatters in re-examination. But that effort did not succeed for thelearned District Judge, while holding that there were dealings betweenthe plaintiff and the defendant and that the sum claimed was due,dismissed the plaintiff’s action on the ground that the plaintiff hadtransferred his entire business to his three- children on 31.5.48. It willbe noted that the action was filed on 28th October, 1948.
It is unfortunate that after the plaintiff’s evidence was concluded a-utcific issue was not raised as to whether, in view of his admission thatbe had transferred his business to his children, the plaintiff could maintainthe present action. But the omission to frame that issue is not 'a fatalirregularity. The matter was argued on the footing that there was sucha point in issue between the parties and the learned District Judge hasdismissed the plaintiff’s action on that ground.
Mr. Jayasundera contends that on the plaintiff’s evidence there wasno complete cession by the plaintiff to his children of his right of action tothe debt in question. What more was necessary to complete the cessionI cannot imagine. Wessels in his law of Contract in South Africa(Vol. 1, p. 546) states the law thus : —
'' ,Sec. 1703.—The cession transfers the rights of the creditor whetherthe debtor knows of it or not, and whether he consents or objects.
As, however, the vinculum juris is between the original creditor andthe original debtor the latter is entitled to pay the former so long asbe is ignorant of the cession, and if the creditor accepts the paymentthe debt is discharged.
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•SWAN J.—Thomas Silva v. Hemalatha Hamine
Sec. 1704.—If. however, the cession is complete and the debtorknows of it he can no longer pay the original party but must pay tothe cessionary.
Sec. 1705.—As long as the cession is incomplete the original creditormay sue the debtor but as soon as the cession is complete the cedent isdeprived of every right of action against the debtor. The cessionary isthen the only party entitled to sue ’’.
Dealing with Cession of Action .Maasdorp (see Fifth Kdition, Vol. 1Y.p. 183) says : —
■' The essentials of a valid cession of action correspond, in the main,with those of a valid transfer of ownership of movable property. Theyare (1) a right of action capable of being ceded and actually vested inthe person proposing to deal with it, (2) an intention on the part of sucha person to cede the right and (3) a formal cession of it according tolaw.”
There can be no question that requirements (1) and (2) are satisfied inthe present case and inasmuch as no special formalities are necessaryunder our law for the assignment of a debt, the cession of action wascomplete when the plaintiff transferred to his children his entire businessand the debts due to him. Thereafter he had no right to sue his debtors.That right passed to the cessionaries.
It may also be useful to refer to a passage in Voet (XVIII 4. 15) quotedby Bertram C.J. in Periyanayagampillai v. Silva and others 1. I shallreproduce the learned Chief Justice’s transalation of the Latin : —
” Certainly according to our customary law on the subject of theassignment of actions the opinion has prevailed that the whole title ofthe assignor is extinguished by the assignment and that the assignor canno longer enforce payment of the debt but only the assignee can do so, evenalthough notice has not yet been given by the assignee to the debtornot to pay to the assignor. But, nevertheless, the debtor, who inignorance of the assignment, in good faith pays the assignor, is whollydischarged. ”
In my opinion the plaintiff had ceded his right of action to recoverthis debt from the defendant. He could not, therefore, have sued thedefendant and his action must fail.
Mr. Jayasundera, however, falls back on a second line of defence. Hesays that the action should not have been dismissed. He asks us to set' aside the order or dismissal and remit the ease to the lower Court withdirections, that the plaintiff’s children should be added as parties to theaction.
0
I do not think that such an applcation should be allowed.
J (1921) 22 N. L. R. 481.
SWAN J.—Thomas Silva v. Hemalaiha Hamine
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* Mr. Jayasundera relies on the case of VelupiUai v. The Chairman,Urban District Council, Jaffna 1 where the plaintiff who had a cause ofaction against the Urban District Council of Jaffna by mistake namedthe Chairman as the defendant. Abrahams C.J. (with whom Soertsz A.J.agreed) allowed an application to substitute the proper party as defendantremarking that, if the amendment were not allowed, it would be a verygrave injustice to the plaintiff. Learned Counsel for the respondentthere cited the case of Weldon v. Neal – in which Lord Esher M.R. heldthat an amendment should not be allowed which would deprive thedefendant of a plea under the Statute of Limitations. The learnedChief Justice distinguished that case on the ground that it was theresought to amend the pleadings by instituting a fresh cause of actionwhich was outside the period of limitation.
Perhaps the decision in VclvpUlai v. .The Chairman, Urban DistrictCouncl 1 might have been different had the later case of Mabro v. Eagle,Star and British Dominions Insurance Co., Ltd.3 has cited to theirLordships. In that case Serutton L.J. said: —
" The Court has always refused to allow a party or a cause of actionto be added where, if it were allowed, the defence of the Statute ofLimitations would be defeated. The Court has never treated it as justto deprive a defendant of a legal defence. If the facts show either thatthe particular plaintiff or the new cause of action sought to be addedare barred I am unable to understand how it is possible for the Courtto disregard the Statute.”
This case was cited with approval by Soertsz A.J. himself (Koch J.agreeing) in Perera v. Tons.saint ’. In the course of is judgmentSoertsz A.J. remarked: —
‘ ‘ In my opinion a motion to add or substitute Harmanis Appushould not have been entertained at the stage at which it was made.”
But even if we were disposed to accede to Mr. Jayasundera's requestI do not see how it will avail the cessionaries, for in view of the decisionin Perera v. Toussaint 4, with which we agree, the defendant couldsuccessfully set up a plea of prescription against the parties sought to beadded.
In the case of an added or substituted defendant, too, it has been heldthat for the purpose of prescription the action must be taken to havebeen brohght against the new party on the date he was made defendant—see Mohamadu v. Jamis Baas 5.
In my opinion the appeal fails and should he dismissed with costs.
Dias S.P.J.—I agree.
Appeal dismissed.
1 (1936) 39 N. L. R. 464.3 (1932) 1 K. B. ±85.
* (1887) 19 Q. B. D. 394.* (1935) 37 N. L. R. 250.
* 11930) 32 A B. R. 61.