022-NLR-NLR-V-23-APPUHAMY-v.-DISSANAYAKE.pdf
( 88 )
1921*
Present : Bertram C.J. and Do Sampayo J.
APPUHAMY v. DISSANAYAKE.
379—D. C. Negombo, 14,233
Evidence—Informal agreement to lease land—Action to recover moneyadvanced—Defence that defendant was not in default—Avermentthat defendant guaranteed a pertain crop, and that land wouldnot yield that—Can plaintiff lead oral evidence to establish theguarantee and show that defendant was in default ?—Conditionprecedent—Escrow.
By a non-notarial writing defendant agreed to grant a leaseto plaintiff and received a snub of money. Plaintiff sued for therecovery of the sum advanced, and defendant pleaded that plaintiff-was in default. Plaintiff admitted that he refused to take thelease, as the defendant guaranteed to him that the lands to heleased would yield 72,000 nuts a yp&c, but that the lands wouldnot yield so great a quantity.
Held, that plaintiff was entitled to lead oral evidence on thequestion of alleged guarantee to prove that he was not in default.
• The informal agreement, though not valid for the purpose ofbinding either party, was, nevertheless, receivable in evidence forthe purpose of determining the equitable claim set up by theplaintiff.
facts appear from the judgment.
E. W. Jayauktrd&ne, for defendant, appellant.
Pereira, KX3. (with him M. W. H. de Silva and Jayatilelce), .forplaintiff, respondent.
August i; 1921. Bertram C.J.—
This was an action brgnght to recover a sum paid upon an agree-ment for a lease, wMchJmot having been notarially executed, wasnot binding upon the parties. A promissory note was given atthe same time, and the cancellation of this note is also demanded.The defendant opposed the claim on the ground that he was alwaysready and willing to perform his part of the agreement, and togrant the lease to the plaintiff. He maintains that it is the plaintiffwho is in default, as he has refused to take the lease. The plaintiffon his side admits that he has refused to take the lease, giving ashis reason the fact that the defendant guaranteed to him that thelands to be leased would yield 72,000 nuts a year, whereas he hasdiscovered that they will not* yield so great a quantity . I am notclear as to the precise terms of this guarantee which he alleges,but it was treated is the argument oh the footing of .a conditionprecedent.
( 89 )
She law on the subject is clear, and has been settled by the caseof Nagoor Pitche v. Usoof.1 It was there decided that a party whoadvances money on an informal agreement void under section 2 ofOrdinance No. 7 of 1840 is entitled to a refund only if he is not the.party in default. The question therefore is,' who is the party indefault in this case ? The learned District Judge proceeded to trythe action, but when the time came for evidence to be given of thealleged guarantee, counsel for defendant objected to this evidencebeing received, on the ground that it purported to vary the termsof the contract which had been reduced to writing by the parties,and was consequently inadmissible under section 92 of the EvidenceOrdinance. The learned Judge rejected the evidence, but afterhe had done so entertained certain misgivings as to the correctnessof his judgment, and finally came to the conclusion that as he hadshut out this*evidence, and as undec the circumstances it seemedimpossible to decide who was in default, the plaintiff must recoverthe money paid.
Theleamed Judge here madea mistake. The informal agreement,agreement for the lease, though not valid for the purpose of bindingeither party, was, nevertheless, receivable in evidence for the pur-pose of determining the equitable claim set up by the plaintiff. Thelearned Judge had first to determine whether the alleged stipulation,sought tc be annexed to the agreement, could be proved by oralevidence, and having determined that question in the negative,he ought to have determined the farther question as to who wasin default simply on the basis of this informal agreement. If,therefore, he had rightly determined the question of the admissi-bility of the evidence tendered, and if he was right in excludingthat evidence, he ought to have given judgment for the defendant.
But the question arises whether he was, in fact, right in excludingthe evidence. In so doing I think he was acting under a miscon-ception. The plea set up was obviously one intended to be a pleaunder the third proviso to section 92. Aft. issue had been framedfor the purpose of trying that plea in the^fbilGwing terms: “ Wasthe acceptance of the assignment conditional on the lands beingsuch as would yield 72,000 nuts a year 1” And the learned Judgeshould, I think, have heard evidence on that issue.
The case, therefore, must go back for that evidence to be taken,and for the learned Judge to determine: Firstly, was such a stipula-tion as is alleged actually made ? Secondly- did it constitutea condition precedent to the attachment of any obligationunder the contract? And thirdly, has .that condition not beenfulfilled ?
It may be convenient that I should indicate the nature of thecondition contemplated in the proviso. The best example of sucha condition will, I think,'be found in the case of Wallis v. LitleU.2
s20 2$. L. fi. hs {im) 31 L. J. C. P. 100.
1921,
Bbbx&au
C.J.
Appuhamy
v.
Dissanayake
( 90 )
1921.
HmtTOAM
ar.
Appuhamyv.
Dissdnayake
In that oase the defendant agreed to transfer a farm to plaintiff.The agreement was in writing, but it was alleged that it was madesubject to the condition that it should be null and void “ if LordSydney (the defendant’s landlord) should not within a reasonabletime after the making of the agreement consent and agree to thetransfer to the plaintiff.” Earle C.J. there said, referring toprevious cases: “ It was decided that an oral agreement to the sameeffect as that relied on by the defendant might be admitted withoutinfringing the rule that a contemporaneous oral argument is notadmissible to vary or contradict a written agreement. It is inanalogy with the delivery of a deed as an escrow; it neither variesnor contradicts the writing, but suspends the commencement ofthe obligation.” A similar condition may also be found in thewell-known case of Bannerman v. White} Here there was noquestion of variation of a wrjtten agreement, but tBb illustration
is,nevertheless, a very apt one. The agreementwas for the saleof hops. Before commencing to deal defendant asked the plaintiffif any sulphur had been used in the treatment of that year’s growth.The plaintiff said “ No.” The defendant said that he would noteven ask the price if any sulphur had been used. On that basis thecontract was concluded. It was subsequently found that sulphurhad, in fact, been used In the treatment of a small portion of thehops sold. It was held that the agreement was not enforceable.Earle C.J. said (at page 860): " This undertaking was a preliminarystipulation ; and if it had not been given, the defendant would nothave gone on with the treaty, which resulted in the sale. In thissense it was the condition upon which the defendants contracted,and it would be contrary to the intention expressed by this stipula-tion that the contract should remain valid if sulphur had been used.. . . . Upon this statement of facts we think that the intentionappears that the contract should he null if sulphur had been used;and upon this ground we agree that the rule should be discharged.”
It will be necessary, therefore, for the plaintiff to show the preciseterms of the condition which he-alleges, and to explain in what waythat condition was to be tested before any obligation attachedunder the agreement. Now that it has been explained to himexactly what he has to say, it will be no doubt easy for him to say
it,and it will be correspondingly difficult for the learned Judge toascertain whether he is telling the truth. The question will be aquestion of fact for the learned Judge to determine. The casewill go back for that purpose. Costs of the appeal will be costs inthe cause.
De Sampayo J.—I agree.
Sent back.
M1861) 10 C,-B.;N. S. 844.