( 165 )
KADER SAIBU v. TEVEBAYAN.C. B., Kandy, 8,337.
Action by plaintiff on an agreement entered into between defendant and thirdparty—Cause of action—Novation of debt.
The defendant, having purchased the goodwill of S. 5. & Co.’s busi-ness, agreed with them to pay and settle their debts as described in theschedule annexed to the deed of sale. Plaintiff, a creditor of S. S. &Co., whose name appeared in that schedule, having heard of the agree-ment acquiesced in the arrangement, and consequently sued the defend-ant for the recovery of his debt.
Held, that this was a case of novation, and that plaintiff was entitledto sue the defendant instead of the original debtor, since the fact of thecreditor (plaintiff) instituting an action against the delegated debtor(defendant) is sufficient evidence of the creditor's assent to the novation.
LAINTIFF alleged that he sold and delivered to SamsudinSaibo & Co. certain goods, and that they sold the goodwill
of their business to the defendant, who “ in consideration thereof“ agreed and undertook to pay and settle the debt due by them“ to the plaintiff, to wit, Rs. 212.” Plaintiff prayed for judgmentagainst defendant for this amount.
Defendant pleaded that the plaint disclosed no cause of actionagainst him, in that ” plaintiff, being a stranger to the contract,“ could not bring an action in his own name to enforce the per-" formance between two other parties of a contract, though made“ for his benefit,” and on the merits he admitted that SamsudinSaibo & Co. had sold their goodwill of their business to him, butstated that the Rs. 212 claimed had been paid.
The Commissioner, after hearing counsel upon the questionwhether the plaint disclosed a cause of action, called upon thedefendant to explain ” his position,” and being affirmed he stated:“ 1 did not see the plaintiff at the time the deed of sale was signed,“ nor did plaintiff agree to take me up as his debtor; the debt“ due to plaintiff appeared in the schedule of debts, which’I agreed“ to pay; I have not since paid it. Samsudin Saibu & Co. must“ have paid it.”
Thereupon the Commissioner, without hearing the case for theplaintiff, dismissed plaintiff’s action, on the ground that plaintiffshould sue Samsudin Saibo & Co. and not defendant.
Bau;a (with Maartensz), for appellant.—There was a novationof the debt by the substitution of a new debtor, and it was com-petent to S. Saibo & Co.’s creditor, with the plaintiff, to sue therew debtor.
( 160 )
W. Pereira, for defendant, respondent.—The plaintiff was theparty to the agreement, and there is nothing to show that heassented to it. If defendant committed a breach of the agreementbetween him and S. Saibo & Co., it would be open to the latter tosue the defendant for damages, but the plaintiff himself, who isa stranger to the agreement, has no right to seek enforcement ofit in regard' to his debt. The result would be to deprive thedefendant of any defence or claim in reconvention which he mayhave against S. Saibo & Co.
The plaintiff sues the defendant for a sum of money due for goodssold and delivered. It appears that the defendant was not theoriginal debtor, but that the debt had been contracted by a thirdparty. The third party sold his business to the defendant, andupon the sale it was agreed by the defendant with the third partythat he would pay all the debts of the business. The debts werescheduled to the deed of agreement, and the debt now sued forwas included in that schedule. The plaintiff was not a party tothat deed, but, becoming aware of it, he acquiesced in the arrange-ment and subsequently demanded payment from the defendant,and when the defendant neglected to pay he brought this action.
The defendant raised two defences: one, that he was not liableto be sued at all, because the agreement was made between himand a third party and that the plaintiff was not a party to it; and,secondly, he alleged that the debt was no longer due, but hadbeen paid.
The Commissioner decided that the plaintiff had no cause ofaction, on the ground that a person for whose benefit a contractis made cannot suq upon that contract if he is not a party to it.That proposition is correct, but, in my opinion, it does not applyto the present case. This appears to me to be a case of what iscalled “ novation,” which arises when a debtor requests hiscreditor to take another person as his debtor in his stead. If thecreditor assents to that, the original obligation is gone and a newone substituted. Now, whether there has been a novation is inevery case a question of fact; but it seems to me clear that in thepresent case there was a novation.
Whether the mere demand of the debt was sufficient evidenceof the creditor’s assent to create a novation, it is unnecessary todecide, but it seems to me that when the creditor brought thisaction he testified in an unmistakable way that he looked to thedefendant, and to the defendant alone, as being his debtor, andthereby discharged the original debtor. If he were now to sue
the original debtor, it seems to me that the original debtor wouldhave a complete answer to the action. He would be able to say,“ You have unequivocally signified your intention of acceptingthe defendant as your debtor in my stead.” Therefore, I am ofopinion that the plaintiff is entitled to sue.
On the second issue as to payment there was no decision, andapparently that issue was never tried.
The case must go back to try that issue.
Costs to be costs in the cause.
September 12-Boot's, C.J.
KADER SAIBU v. TEVERAYAN