075-NLR-NLR-V-62-CASSIM-Appellant-and-KALIAPPA-PILLAI-and-another-Respondents.pdf
BASITAYAKE, C.J.—Casaim v. TCaliappa Pillar
409
1960Present : Basnayake, C.J., and Sansoni, J.
CASSIM, Appellant, and K AT JAPPA PIDLAI and another,
Respondents
S. C. 679—D. G. Colombo, 36600fM
Landlord and tenant—Payment of rent by cheque—"Validity of payment by chequedrawn by tenant—Validity of payment by cheque drawn by a third party—Pent Restriction Act.
A was a monthly tenant of B’s premises. It was the practice for A to payhis rent by cheque drawn on his bank. In April, 1955, however, B receiveda cheque drawn on a different Bank and signed by a third party, C-
Held, that the cheque sent by C did not operate as payment of rent by A.
“ Payment in a contract of letting and hiring must be in cash. The landlordis under no obligation to accept payment by cheque unless there is an agreement,express or implied, to do so. Such an agreement may be presumed when ovora long period of time the landlord has accepted cheques drawn by tho tenanton his bank account without quostion. But oven such an impliod agreementdoes not cast an obligation on the landlord to accept a cheque drawn by aperson other than the tenant in his* favour in payment of rent. ITor has athird porson a right to force the landlord of another to accept a cheque drawnby him in payment of that othor’s rent. Such a payment by a third porsonnot being a payment in terms of the contract of letting and hiring would notamount to payment thorounder.”
A
ijlPPEAL from a judgment of the District Court,- Colombo.
H. W. J ayewardene,, Q.G., with M. S. Mohamed, for Plaintiff-Appellant.H. V. Perera, Q.C., with S. Sharvananda, for Defendants-Respondents.
June 3, 1960. Basnayake, C.J.—
In this action the plaintiff, who is the owner of premises No. 65 SeaStreet, Colombo, sought to eject the 1st defendant Kumara PerumalKaliappa Pillai, who was his tenant of those premises since February1947 on a monthly tenancy, on the grounds that he was in arrear of rentfor one month after it had become due, and that he had sub-let thepremises without his prior consent in writing. Both these are groundswhich permit a landlord to institute proceedings for the ejectment of atenant without the authorisation of the Rent Control Board.
It would appear that the defendant by an indenture No. 4245 dated30tli March 1955 attested by Kartigasu Thiru Chittampalam, NotaryPublic, transferred the business he was carrying on at the premisesNo. 65 Sea Street and No. 19 Dam- Street to Periannapillai Tirupathy
18—lxii
Y. N. B. 15492—2,033 (2/61)
410
BASNAYAKE, C.J.—O as aim v. K.aliappa Pillai
the 2nd defendant as trustee for his seven children of a trust named the“ Kumaraperumal trust ”. By that indenture Kaliappa Pillai trans-ferred to Tirupathy as trustee—
“ …. All and singular the stock-in-trade, shop goods, oilmanstores, sundries and All and singular the furniture fittings and otherarticles of trade and things whatsoever lying in the aforesaid premisesNos. 65 Sea Street in Colombo and 19 Dam Street in Colombo and alland singular the moneys book-debts and other assests of whatsoeverincluding the goodwill, quota rights, import rights and other licencesand privileges as aforesaid of the business carried on by the Settlorunder the name style and firm of * Sri Lanka Stores * and thedeposits with the Landlords of the said premises and the GovernmentElectrical and Telephone Departments and more fully described inthe schedule hereto and delivered possession of same …. ”
The 1st defendant was not residing at No. 65 Sea Street, but at No. 8Charlemont Road, Wellawatte. It is common ground that the rentof the premises was paid to the plaintiff on or before the 10th of eachmonth. It was the practice for the 1st defendant to pay his rent bycheque drawn on his bank, but on 6th April 1955 the plaintiff receiveda cheque drawn on the Indian Bank Limited (Pi) and signed as follows :—
“ Sri Lanka StoresP. TiruppathyProprietor.”
with the following letter (PI a) :—
” SRI LANKA STORESImporters & Exporters
Oilmanstores, Groceries, Hardware, Stationery, &c.
65, Sea StreetColombo—11, 6.4.1956.
Mr. M. S. M. CassimMills Avenue
Skinners Road SouthColombo.
Dear Sir,
Herewith enclosing a I. B. cheque No. C. 131048 for Rs. 210/83 Rupeestwo hundred and ten and cents eighty-three being house rent for the abovepremises for the month of March 1955.
Please be kind enough to acknowledge receipt for same.
Thanking you,
Yours faithfully,
Sgd. Illegibly
S. L. S.”
33 ASISTAYATCE, C. J.—Cassim v. ICaliappa Pillai
411
The plaintiff says that the cheque and the letter which accompaniedit put him on inquiry, as the cheque was signed by a person who wasnot his tenant, and he went to the premises at No. 65 Sea Street andfound that P. Tiruppathy, the 2nd defendant, was carrying on businessthere. Thereafter on 5th May 1955 the 1st defendant sent to the plaintiffa cheque drawn on the Bank of Ceylon and signed—
** Sri Lanka Stores
K.P. Kaliappa PillaiProprietor.”
with the following letter of the same date (P 5) :—
“SRI LANKA STORESImporters & Exporters
Oilmanstores, Groceries, Hardware, Stationery, &c.
M. S. M. Casim Esq.Colombo.
65, Sea Street,Colombo—11, 5.5.1955.
Dear Sir,
Herewith enclosing a Bank of Ceylon Cheque No. D/3 99850 forRs. 210/83 being house rent for the month of April 1955.
Please be kind enough to acknowledge receipt for same.
Thanking you,
Yours faithfully,
Sgd. Illegiblyfor S. L. S.”
In neither of the letters did the person who signed it describe the capacityin -which he did so. It is contended on behalf of the plaintiff that thelearned District Judge was -wrong in dismissing his action holding that theIndian Bank Cheque (PI) discharged the 1st defendant’s liability inrespect of the rent for March, and that it was the duty of the plaintiffto have returned the cheque if he was not accepting it as payment of
412
BASNAYAELE, C.J.—Gas aim v. Raliappa filial
rent. The plaintiff has proved by calling an officer of the Indian BankLimited that the 2nd defendant’s account in that Bank had been closedon 9th March 1955 and that at t the time the 2nd defendant had drawnthe cheque in the plaintiff’s favour he had no account in the IndianBank. The question that arises for decision is whether the chequesent by the 2nd defendant operated in law as payment of his rent by the1st defendant.
Payment in a contract of letting and hiring must be in cash (VoetBk XIX Tit. 2 s. 8). The landlord is under no obligation to acceptpayment by cheque unless there is an agreement, express or implied,to do so. Such an agreement may be presumed when over a long periodof time the landlord has accepted cheques drawn by the tenant on hisbank account without question. But even such an implied agreementdoes not cast an obligation on the landlord to accept a cheque drawnby a person other than the tenant in his favour in payment of rent. Norhas a third person a right to force the landlord of another to accept acheque drawn by him in payment of that other’s rent. Such a paymentby a third person not being a payment in terms of the contract of lettingand hiring would not amount to payment thereunder. In the instantcase there was not only a payment by a cheque drawn by a person otherthan the tenant but the cheque itself was drawn by a person who hadno account current at the time at the Bank on which it was drawn.“ Sri Lanka Stores ” is not a legal person. The existence of those wordson the cheque (PI) is no indication that the plaintiff’s tenant was thedrawer of the cheque especially as any such impression is erased bythe name of the drawer and his description of himself as proprietor.The accompanying letter did not clarify the position. In the circums-tances it is understandable that the plaintiff became suspicious of thecheque. The sudden departure from the practice of sending his owncheque, without a word of warning, put him on his guard. In ouropinion the cheque sent by the 2nd defendant drawn on the IndianBank Limited does not operate as payment of rent by the 1st defendant.
Learned counsel for the appellant has drawn our attention to the caseof Smith v. Cox 1 cited in Woodfall on Landlord and Tenant, where thequestion of payment of rent by a stranger has been considered. Inview of the conclusion we have reached it is not necessary to discuss thatdecision.
On the question of sub-tenancy it is clear from the indenture enteredinto by the 1st defendant and the 2nd defendant that the 1st defendanthad surrendered bis interests in the business, and that he was not livingon the premises in question and had no interest as a tenant. Learnedcounsel for the respondent had argued that although the 1st defendantdid not carry on the business he was entitled to be the tenant. On theevidence before us we are unable to escape the conclusion that the 1stdefendant having transferred the business by deed sought by this indirectmethod to transfer the tenancy to the trustee. In his evidence the 1st
i (1940) 3 AU JS. R. 546.
Cornelius Per era v. Leo Per era
413
defendant says that the rent of the premises was paid by him personally,and that even after the business was transferred he paid the rent himself.The statement of accounts produced by him does not bear that out andthe rents paid on account of the premises in question are shown in theaccounts of the business after the transfer.
We therefore think that the plaintiff’s action is entitled to succeed,and we accordingly set aside the judgment of the learned District Judgeand direct that judgment be entered for the plaintiff as prayed for in hisplaint with costs both here and below.
Sansont, J.—I agree.
Appeal allowed.