Gunawardene Harminey and Charles Appuhamy
1944Present: de Kretser and Wijeyewardene JJ.GUNAWARDENE HAMINEY, Appellant, and CHARLESAPPUHAMY, Respondent.
305—D, C. Matara, 14,598.
Penalty-—Sale of property subject to a right to re-transfer—Subsequent ag'reemenEto forfeit right to re-transfer—Relief against forfeiture.
Plaintiff transferred certainfields to thedefendantsubject to a rightof
re-transfer cmrepayment ofthe purchasemoney.
By a subsequent agreement, the defendant leased the fields to theplaintiff, thelatter undertaking to delivera certainquantity ofpaddyin-
lieu of rent.It was alsoprovided by the agreement thatonfailureto
deliver the paddy the plaintiff should forfeit the right to re-transfer.
Held (in an action brought by the plaintiff for re-transfer) that the-plaintiff is entitled to relief against the forfeiture of his right to re-transfers
112 T. C. at 742.
366WiJKYEWAKDENE J.—Gunaward&ne Maminey and Charles Appuhamy
PPEAXi from a judgment of the District Judge of Matara.
H. V. Perera, K.C. (with him L. A. Rajapak.se, K.C.), for defendant,appellant.
N. E. Weerasooria, K.C. (with him S. W. Jayasuriya), for plaintiff,respondent.
Cur. adv. putt.
July, 7t 1944. Wijeyewardisne J.—
By deed 9462 of July 23, 1941 (P 1), the plaintiff transferred his interestsin five fields to the defendant for Its. 850, reserving to himself the right torepurchase these interests on payment of Its 850 to the defendant.By an earlier deed 9461 of the same date the plaintiff’s son transferredto the defendant certain small interests he had in some of these fields forIts. 100, subject to a reservation similar to that in P 1. By deed 9462of the same date (D 1) the defendant leased to the plaintiff and his sonfor 1 year from September 1, 1941, the lands conveyed to him under thetwo eai’lier deeds. The rent due under the lease was given as Its. 170,but it was agreed that, in lieu of the sum of Us. 170. the lessees shoulddeliver to the lessor 10 amunams of paddy from the Maha crop and7 amunams from Yala crop. The lease then went on to provide—“ In the event of the lessees not delivering unto the lessor the paddy asagreed upon, the right vested in the lessees to obtain re-transfer of thesepremises, upon the two deeds Nos. 9461 and 9462 attested by me today,shall be forfeited, consequent on such default or failure ”.
The plaintiff tendered to the defendant Bs. 350 on August 18, 1942,and requested her to execute a transfer in terms of P 1. On the. defend-ants failure to comply with his request, the plaintiff instituted thisaction on September 1, 1942, to obtain a re-transfer of his properties.
The defendant pleaded, inter alia, that the plaintiff “ has forfeited theright to obtain a transfer ” by his failure to deliver to her the sevenamunams of the Yala crop.
The learned District Judge held that the plaintiff had failed to deliver 7amunams of paddy but declared the plaintiff entitled to a re-transferon hie paying, in addition to the sum of Rs. 850, a sum of Rs. 160 byway of damages for the non-delivery of the 7 amunams of paddy. Thedefendant has appealed from that judgment.
The deed P 1 has not been signed by the defendant, but in view of thedecision in Jonga v. Nanduwa1—which is an authority binding on us—1 am unable to accept the contention of the defendant’s Counsel that thecondition with regard to the re-transfer is not binding on the defendant.The question then for consideration is whether, in the circumstancesof this case, the defendant is entitled to resist the plaintiff's claim bythe plea of forfeiture. The law on the subject is stated in Pothier onObligations, section, 346 as follows: —
“ It remains to be observed, that if the penalty which is stipulatedin lieu of ordinary damages, is reducible when excessive, a fortioriought the penalties stipulated in default of a payment of a sum of
(1944) 45 N. L. R. 128.
Perumal and Harding
money, or other thing which is consumed by use, to be reduced to thelegitimate rate of interest, or even entirely rejected, in cases where itis not allowed to stipulate for interest”.
-In the present case, the plaintiff’s primary obligation was to deliver 17amunams valued at Us. 170. In order to ensure the due discharge ofthe primary obligation, the plaintiff bound himself by the accessoryobligation to forfeit the right which he had to repurchase the lands forEts. 850. The plaintiff has stated in his evidence that those lands wereworth Bs. 2,000 at the execution of P 1 and were worth more at theinstitution of this action. That valuation has not been challenged.It is now- sought to enforce this accessory obligation because the plaintifffailed to deliver 7 out of the 17 amunams which he had to deliver.
Having regard to the facts of this ease, I hold that there is an “ extra-vagant disproportion ” between the benefit resulting to the defendantfrom an enforcement of the accessory obligation and any possible amountof damages that could have been contemplated by the parties at thetime of the lease as likely to accrue to the defendant from the failureof the plaintiff to deliver the paddy. Moreover, in this case the defendantis seeking to enforce the clause of forfeiture though the plaintiff hasdischarged his principle obligation to a large extent. In these circum-stances, it is not possible for a Court to permit the enforcement of theaccessory obligation which is highly penal in nature (see Dunlop PneumaticTyre Company Limited v. New Oarage & Motor Company, Limited 1.
I would dismiss the appeal with costs.ue Kretser J.—I agree.
GUNAWARDENE HAMINEY, Appellant, and CHARLES APPUHAMY, Respondent