028-NLR-NLR-V-47-MARTHELIS-APPUHAMY-Appellant-and-PEIRIS-et-al-Respondents.pdf
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Afarthelie Appuhamy v. Petris.
1946Present: Soertsz A.C.J. and Rose J.MARTHELIS APPUHAMY, Appellant, and PEIRIS, et al..Respondents.
64—D. C. Chilaw, 11,947.
Contract—For benefit of third party—The third party can enforce it—Raman-Dutch Law.
Where a covenant was entered into between a lessee and a sub-lesseefor the benefit of the original lessors,—
Held, that the lessors could, under the Roman-Dutch law, claim thebenefit of, and sue on, the stipulation made in their favour, althoughthey themselves were no parties to the contract of sub-lease.
PPEAL from a judgment of the District Judge of Chilaw.
V. Perera, K.C. (with him H. A. Koattegoda), for the defendant,appellant.
N. E. Weerasooria, K.C. (with him Austin Jayasuriya), for theplaintiffs, respondents.
Cur. adv. fruit.
SOERTSZ A.C.J.—Martheiis Appuhamy v. Peiria.
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January 16, 1946. Sobbtsz A.C.J.—
The facts that are material for the consideration of the question thatarises in thia ease are as follows:—The first plaintiff and her deceasedhusband, being in urgent need of a sum of sixty thousand rupeesobtained it from the first plaintiff’s father, giving him in return a lease ofcertain lands belonging to them, for a period of 20 years from March 6,1926, at an annual rental of Ra. 3,000. A covenant in the indenture oflease provided “that if the said lessee possessed the property herebyleased within the first seventeen years in full absolutely without stayinterruption from the said lessors or fhom any one of their heirs andso forth (sic), he shall assign back the lease of the remaining three yearswithout recovering any money from the lessors or their heirs and so forth(sic) after such possession, that the said lessors shall cause to possess theproperty hereby leased within the said leasehold period uninterruptedlyand that if any damage of or loss sustained in failure thereof the lessorsshall pay all such damage and loss unto the said lossee. That the lesseeshall at the termination of the said lease deliver back the said propertyunto the said lessors without causing any damage thereto and shallvacate same peacefully. And the said two parties the lessors and lesseefor themselves and their heirs, executors, administrators and assignshave hereby further promised and bound to and with the other party forthe true performance of the aforesaid conditions
By an indenture of lease dated June 4, 1927, the lessee sub-leasedthese lands to his son Walter for a period of eighteen years and eightmonths subject to a condition srmflar to that undertaken by him.Walter sub-leased the premises at the end of fourteen years and six months•to one K. A. S. Fernando for a period of four years and three monthsproviding for an earlier termination of the lease. K. A. S. Fernando,himself, by indenture dated October 6, 1942, sub-leased these lands t6the defendant-appellant for a period of forty-one months, an earliertermination being again provided for.
The plaintiffs now complain that although the period of seventeen yearshas elapsed without let or hindrance on their part to the persons entitledto the possession of these lands, the defendant has continued to possessthem wrongfully and unlawfully. The first plaintiff is one of the lessors,and the second, third and fourth plaintiffs are the children bora to herand the deceased lessor. The defendant is the last sub-lessee, his leasehaving commenced when the seventeen-year period referred to in thefirst indenture of lease had five months more to go to attain completion.They therefore pray for a declaration:—
(а)that the defendant holds the leasehold rights in respect of the said
landB and premises for the benefit of the plaintiffs as regardsthe period commencing from March 6, 1943, to March 6, 1946.
(б)that the defendant bo ordered to execute a valid assignment of the
said leasehold rights for the said period in favour of the plaintiffs.
Alternatively, that the Court may be pleased to declare that therights of the defendant to hold the said lands and premisesbecame extinguished on March 6, 1943, and that the plaintiffsbecame entitled to the said lands and premises.
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SOERTSZ A.C.J.—MartheUs Appuhamy v. Petris.
{d) that the Court may declare that the plaintiff's became entitledto the possession of the said lands and premises on March 6,1943, and that the defendant is in the possession of the sameunlawfully since the said date and is liable to pay damagesfrom March 6, 1943, till the plaintiffs are restored to peacefulpossession of the said lands and premises at a rate to beascertained by Court.
The trial Judge Found that the lessee and the sub-lessees “ had undis-puted possession of the leased lands for a full period of seventeen years”.
I agree with him for, on the evidence in the case, any other conclusion ishardly possible. On that finding, there can be no doubt whatever thatif the question raised in this case had arisen between the plaintiffs andthe original lessee, it would have had to be answered in favour of theplaintiffs.
The question, then, is whether the position in law is different so far asthe defendant the ultimate sub-lessee is concerned. The original lesseebound himself, and his executors, administrators, and assigns for the dueperformance of the covenants in the indenture of lease. It is clear,therefore, that there was, impliedly, an agreement between the lessorsand the lessee, permitting the lessee to assign that is to say to cede bothhis rights and liabilities. In the event of such an agreement, it is wellestablished that the lessee may either sub-let or assign. If he assignsthe lease to a third party there is a complete delegation or novation of thecontract and the lessee goes out of the picture and the cedent takes hisplace. But if the lessee only sub-lets, “ there are two separate vinculajuris, one between the landlord and the lessee and the other between thelessee and the sub-lessee ” (Wessels’ Law of Contract) Vol. 1, page 551.)There is in that event, priima facie, no privity of contract between theoriginal lessor and the sub-lessee. But this general rule may be departedfrom by agreement between the parties concerned. In this case, whenthe lessee sub-let the premises to his son the first sub-lessee, it wasexpressly agreed between the two parties that if the latter had possessionof the premises leased for fifteen years and eight months he shouldsurrender the remaining three years to the lessor or to his heirs and soforth. But when this sub-lessee had had possession of the premises forfourteen years and six months, he sub-leased them to K. A. S. Fernandowho agreed “ that he will at the expiration or sooner determination of thesaid term peaceably and quietly surrender and yield up the said premisesunto the said lessor or his aforewritten in good and proper condition.''
Similarly, when K. A. S. Fernando sub-leased the premises to thedefendant-appellant, the latter convenanted and agreed “ that he willat the expiration or sooner determination of the said term peaceably andquietly surrender and yield up the said premises unto the said lessor or hisaforewritten in good and proper condition ”. There was, thus, an under-taking by the defendant-appellant of the obligation to surrender the leaseto his lessor or to his lessor’s aforewritten on the expiration or soonerdetermination of the term of the lease. In the context afforded by allthe indentures read together, the word “ aforewritten ” must be construedas including the original lessors. The question then arises whether the
Alima Natchiar v. Marikar.
81
original lessors can claim the benefit of, and sue on the stipulation madein their favour, they themselves being no parties to the contract of sub-lease. The answer to that question is, in my opinion, that they canunder the Roman-Dutch law which is the law applicable in this case.In the case of Tradesmen's Benefit Society v. Du Preez 1, Lord de Villierssaid “ where there is in existence a binding agreement for valuableconsideration between the promisor and promisee, there can be nopossible injustice in allowing a third person for whose benefit the promisewas made, and was intended to be made to recover upon the same1’,particularly, where one of the contracting parties bears a certain legalrelationship to the third party as is the case here.
But quite apart from the plaintiffs’ claim upon the contract, the defend-ant was, on the finding of the trial Judge, liable in tort as a trespasseron these lands from the date of the termination of the seventeen-yearperiod, and the alternative remedy sought in paragraph (c) of the prayeris substantially based on that ground.
I am inclined to agree with the trial Judge that the last two leaseswere collusive transactions resorted to in an attempt to defeat the conditionof an earlier termination of the lease.
In regard to the amount of damages, I see no reason to interfere withthe award of the trial Judge.
I would dismiss the appeal with costs.
Rose J.—I agree.
Appeal dismissed..