092-NLR-NLR-V-30-NUGAWELA-v.-GEORGE.pdf
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Present: Lyall Grant and Akbar JJ.• NUGAWELA v. GEORGE20—D. 0. Kandy, 34,559Sale*—Action for purchase price—Plea of failure of consideration—Warranty of tide— Vacant possession.
Where the plaintiff sued the defendant on a cheque given .forthe purchase price of an interest in land, it is open to the defendantto raise the defence of failure of consideration on the ground thatthe plaintiff had no title to the land sold by him. .
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LAINTIFF sued defendant on a cheque which had been givenas the purchase price of certain rights in land, but payment
of which had been subsequently stopped. Defendant pleadedthat there was a total failure of consideration, in that plaintiff hadno right, title, or interest in the land. At the trial Counsel fordefendant sought to raise certain issues with a view to proving this,but the District Judge disallowed them on the ground that on theexecution of the deed plaintiff was entitled to immediate payment.Defendant appealed.
H. V. Perera, for defendant, appellant.—When a person is sued,on a bill of exchange or cheque he can plead total failure of con'sideration. English law must apply (Chalmer’s Bill of Exchange,8th ed., 114).
It is not necessary for the purchaser to sue party in possession{Ratwatte v. Dullewe 1).
Navaratnam, for plaintiff, respondent.—An examination of thedocuments, put in evidence, establishes the following facts :—
On a purchase from all the co-owners the defendant is nowthe owner and possessor of the entirety of the land.
Two of these co-owners had on an earlier deed transferredtheir rights to the plaintiff.
The defendant obtained from the plaintiff a transfer of thesevery rights, with the knowledge that the deed, on whichthe plaintiff based his title, was executed during thependency of a partition suit which was eventuallyabandoned.
The execution of a deed of conveyance by the plaintiff,,transferring the self-same rights, was the considerationfor the cheque, payment of which defendant stopped..
In the light of the above facts it cannot be argued that there is afailure of consideration. Further, under our law a purchaser isunder an obligation to pay the price, the moment his vendor
» 10 N. L. R. 304.
1929,
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1989.
JVvgawelav.
George
executes a doed of conveyance, in pursuance of a contract of sale.On the score of any defect of title, discovered thereafter, thepurchaser cannot withdraw from the sale and refuse to pay theprice. The only primary obligation resting on the vendor is togive the purchaser “ vacant possession ”, which in the present casethe defendant obviously has. The Full Bench ruling in Jamia v.Suppa Ummaetal.1 supports this submission. Clearly the questionof title cannot be raised in these proceedings.
H. V. Perera, in reply.—Knowledge is no defence. In Roman-Dutch law a distinction must be drawn between a sale of a land andthe sale of “ the right, title, and interest. ” In the case of sales byFiscal the purchaser can in one instance refuse to pay, i.e., wherethe debtor had no saleable interest. (Berwick’s Voet, p. 406.)
In Jamia v. Suppa Umma case the vendor held subject to a fideicommissum. It is not a case of a complete failure of consideration.
March 21,1929. Lyall Grant J.—
This is an appeal from an interlocutory order made in theDistrict Court of Kandy refusing to a defendant, sued on a chequefor the purchase price of an interest in land, the right to raise indefence the question of his vendor’s title.
On October 31, 1926, the defendant and plaintiff executed adeed by which the plaintiff transferred to the defendant all hisright, title, and interest in certain lands. The deed cited the plain-tiff’s title as contained in a deed of December 11 and 28, 1925, bywhich two of the common owners of the lands in question conveyedto him an undivided one-eighth share of the lands in question.
The defendant paid the price by cheque, but stopped paymentbefore the cheque was cashed, and now refuses to pay on theground that at the time of sale the vendor had no title to the land.In other words, he pleads no consideration.
The learned District Judge has held that, by the execution of thedeed, whatever rights the plaintiff had in the land vested in thedefendant, and that the former was entitled to immediate paymentof the consideration. He says it only remains for defendant to getpossession of the land, or if he should fail to do so, to call on theplaintiff to put him in possession, and that it is not open to him toquestion his vendor’s title till he has been evicted.
Suppose, however, that the purchaser had, either before or afterthe transaction, bought the land from the true owner. In such acase he could not suffer eviction, and would' not on the abovereasoning be able to recover the money once paid although hereceived no consideration. I do not think the question can bedecided so simply. The cases cited by the learned District Judgerefer to instances where vacant possession had been given.
‘ 17 N. L. R. 33.
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The defendant has averred in his answer .that the plaintiff falsely.•rd fraudulently represented to him that he had a good title to the!>md and that it was only after the execution of the deed that hediscovered plaintiff had no title, and that the deed passed nothingat all.
Can the defendant be precluded from proving this averment,and if he succeeds in proving it, will he be liable to pay the price ?
I can find no law which makes it obligatory on a purchaser toi.nplement his contract under such circumstances. When there is(istake induced by the fraud of one party, the contract can beavoided.
The issues actually framed of consent and propounded fordecision are—
Was the deed 294 of December 11,1925, in favour of plaintiff’s
vendor executed pending a partition action in respect ofthe property conveyed ?
If so, did the transfer by the plaintiff convey no title to the
defendant ?
If so, was the defendant entitled to stop payment of the
cheque ?
'4) Was there a failure of consideration of the cheque ?
Is it open to the defendant to raise the question of title inthis case ?
These issues raise the question of mistake but not of fraud.I am not satisfied that if these issues are answered in defendant’sfavour he can be compelled to pay the purchase price. No casehas been cited to us which goes so far.
Even if the defendant does not wish to stand by the issue offraud raised in his answer, I think he ought'to have an opportunityof proving that no consideration passed, that the vendor conveyedno title and was therefore not in a position to give vacant possession.
Payment by cheque is only conditional payment, and if thecheque is stopped before payment there is no payment of theprice. The buyer has not performed his share of the contract, andthe only question we are called upon to decide at present is whetherdelivery of a worthless deed constitutes such performance on theseller’s part of the contract as to entitle him to call upon thebuyer to perform his part.
In Ratwatte v. Dvlhwe 1 it was held by a Full Bench of thisCourt that apart from any express agreement a vendor of immov-able property is bound to deliver vacant possession of the propertysold to the vendee, and on his failure to do so the vendee is entitledto rescission of the sale and a refund of the purchase money.
1 10 N. L. R. 304.
LyallGrant J.
Nugawela
v.
George
1989.
LyaixObant J.
.Nugawela
v.
George
In the Full Bench case of Jamis v. Suppa Umma1 the vendorhad a partial interest, and the question at issue was whether thepurchaser had a right to refuse to accept an offer of vacantpossession.
The authorities cited in the judgment of Jamis v. Suppa Umma(supra) do not support the proposition that if the vendor cannotgive vacant possession the purchaser is bound to pay the purchaseprice. On the contrary, it was there pointed out by Wood RentonA. C. J. that there was a primary obligation on the vendor to givethe purchaser vaoant possession and to warrant and defend thetitle after the purchaser has been phfced in possession.
I would therefore set aside the judgment of the learned DistrictJudge and return the case to the Court below in order that thedefendant may have an opportunity of proving his averments.The appellant will have the costs of appeal and the costs of theargument in the Court below on this point. Remaining costs tobe costs in the cause.
Akbas J.—I agree.
Appeal allowed.