PERERA v. AMARASOORIYA

027-NLR-NLR-V-12-PERERA-v.-AMARASOORIYA.pdf


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[In Review.]
Present: The Hon. Sir Joseph T. Hutchinson, Chief Justice,Mr. Justice Wendt, and Mr. Justice Middleton.
PERERA v. AMARASOORIYA.
D. C., Gcdle, 8,250.
Ordinance of Frauds (No. 7 of 1840)—Authority to enter on land andprospect for plumbago—Interest in land—Part performance—Action ex dolo malo.
An authority to enter on land and prospect for plumbago and towork the mines found there and take away plumbago is an agree-ment creating an interest in land, and should be notarially attestedunder seotion 2 of Ordinanco No. 7 of 1840. Where it is not soattested, no action lies for the recovery of damages for breach ofsuch agreement.
The doctrine of part performance has not been recognized in Ceylonto the extent to which it prevails in the English Courts of Equity.
H
EARING in review of the j udgment of the Supreme Court datedJuly 1, 1908. The material facts appear, in the judgments.
Bawa, for plaintiff, appellant.
Van Langeriberg (with him A. St. V. Jayewardene), tor defendant,respondent.
Our. adv. wit.
March 2, 1909. Hutchinson C.J.—
This is a hearing in review. The action was for damages; thecause of action is not clearly stated in the plaint, but it seems to befor breach of an agreement by the defendant to allow the plaintiffto prospect for plumbago in the defendant’s land. The DistrictJudge in his judgment treated the action as one for damages forbreach of a partnership contract, and held that the plaintiff and thedefendant were partners, and awarded the plaintiff damages forbreach of the partnership contract. On appeal the judgment wasset aside and the action was dismissed, because there was noallegation of a partnership, and no issue as to whether the plaintiffand the defendant were partners, and no evidence of any partnershipbetween them, and because the agreement alleged in the plaint isan agreement creating an interest in land and was not in writingas required by Ordinance No. 7 of 1840.
The plaintiff alleges that “ in May, 1905, the defendant authorizedthe plaintiff to prospect for plumbago ” in the defendant’s land,the plaintiff agreeing to pay the defendant one-tenth of the outputas ground share; that the plaintiff opened a plumbago mine onthe land and worked it with four other men as shareholders in one -third of it; that, subject to the one-tenth ground share of the
1909.
March 2.
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1909. defendant, the mine is the property of the plaintiff and the other fourMarch 2. IIlen. that the defendant on and after April 1, 1906, unlawfullyHutchinson and fraudulently prevented the plaintiff from going on the land;
C that the plaintiff suffered damages to the extent of Rs. 8,000through being prevented from winning the plumbago, which hehad successfully prospected; and he claimed that sum as damages.
The appellant first contends that the plaintiff and the defendantwere partners from the beginning under the “ authority to prospect,”because the four men who were his shareholders, and who, as hesays in the plaint, were " employes of the defendant,” were merely“ dummies,” and that the real and only shareholder with him wasthe defendant. Jt is impossible to draw such an inference fromthe statements in the plaint; there was no issue about it; and itis clearly unfounded. He also suggests that the defendant becamea partner afterwards by purchase of their shares from two of thefour shareholders. Such a purchase would not of itself make thedefendant a partner, nor was it said in the plaint or suggested inthe issues that the defendant so became a partner, nor does theevidence prove it.
With regard to the original claim as made in the plaint, andthe defendant’s answer that “ the authority to prospect ” was notexecuted in the manner required by Ordinance No. 7 of 1840, theappellant says, first, that such an authority is not an agreementfor establishing an interest in land. He relied on Elias v. Jeronis,1a decision of the Full Court, which is dissented from by anotherFull Court in Meregalpedigedera Saytoo v. Omttagedera Kalinguwa.2When a Court is confronted by two conflicting decisions of Courtsof co-ordinate jurisdiction, it must, decide which of them it shouldfollow (see 10 N. L. R. 148). And in my opinion an authority toenter on land and prospect for minerals there and to work the mines,if any, found there and take away the minerals is obviously anagreement for the creation of an interest in land.•.
Secondly, it is argued that in this case there was part performanceof the agreement, and therefore the Statute does not apply. Insupport of this argument reference was made to Perera v. Fernando,3That case does not decide that where there has been partperformance of such an agreement as is referred to in section2 of Ordinance No. 7 of 1840 an action will lie on the agreementalthough it is not in writing; but only that an action will liefor use and occupation where a person has been in occupationunder a parol agreement, and that, for the purpose of showingwhat would be a fair sum to allow for use and occupation, theterms of the parol agreement may be proved. And if we admitthat a man who has entered on another person’s land under a verbalagreement for its sale or lease to him, and has spent money on it onthe faith of the agreement, can recover the money he has so spent,l (1885) 7 3. C. O. 71.* (1887) 8 S. O. C. 67.* Ram. (1863-1868), 83.
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that is not the same tiling as allowing him to enforce the agreement 1009.or to recover damages for breach of it. A man who enters into March 2.possession of land under an agreement such as is required by the hutohinsokOrdinance to be in writing, but which is not in writing, cannot O.J.sue on the agreement (2 Browne, 256, 202; see also 2 N. L. R.
80,255). No local authority and no rule of Roman-Dutch Lawhas been quoted as showing that an action will lie to enforce or torecover damages for breach of such informal agreements; and inmy opinion the plain terms of our Ordinance forbid it.
The appellant also suggested for the first time at this hearing inreview that he ought to be awarded compensation for the improve-ments he has made on the land. I think that that olaim shouldnot be allowed, as there is no allegation of any such improvements,no issue on the point, and no evidence of any improvements.
Lastly, he contends in the alternative that he is entitled to recoverdamages for dolus malus. If that means fraud, it is true that theplaint alleges that the defendant “ unlawfully and fraudulently ”prevented the plaintiff from working the mine; but no specific actof fraud was alleged ; it seems that what was meant by those wordswas that the defendant knew that the plaintiff had discoveredplumbago, and that his object in preventing the plaintiff fromworking it was that he might work it himself. The defendant inhis answer denied that he had any knowledge as to the veins ofplumbago found by the plaintiff, or that his refusing to allow theplaintiff to resume operations was with the view of working themine. And there is no issue as to any fraud. If, however, theplaintiff merely means by dolus malus that the defendant’s act waswrongful, and that he is liable to repay the money which the plaintiffhas spent unprofitably on the land, there might have been Somethingto say for such a claim, if it had ever been made, and if evidencehad been taken as to the money which the plaintiff had spent, andwhether he had made a loss thereby. If that claim had been madeat an earlier stage, we do not know whether or how far the defendantwould have disputed it, or what evidence he might have produced toshow that there had been no loss. The evidence, which was taken,but which was not directed to that point, would show that the plaintiffhad lost about three to four hundred rupees ; but if there had beenany question about it, the evidence might have been very different.
The respondent also points out that one of the issues was whetherthe plaintiff worked the mine under the terms stated in paragraph 4of the answer, that is, on a promise that, if there was a cessationof work by the plaintiff for three months continuously, the defendantwas to have the right to prevent him from resuming work; and ifso, did the plaintiff fail to work in breach of that term ? The DistrictJudge found that there was a time limit fixed; but lie was notsatisfied that the term was three months, and held that it was sixmonths. He found that the plaintiff attempted to resume workio-
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1909.
March 9.
Hutchinson
C.J.
in June, and he appears to have thought that the six months didnot expire until June 30, and that therefore the plaintiff had notfailed to work for three months. As I said in my judgment which isunder review, neither party had ever said that the term was sixmonths, and there was no evidence that it was so. I think thaton this issue also the defendant ought to have succeeded.
In my opinion the decree which is under review ought to beaffirmed, with costs to be paid by the appellant.
Wendt J.—
This is a hearing in review, preparatory to appeal by the appellantagainst the judgment of this Court dated July 1,1908. The DistriotJudge who tried the action awarded plaintiff Rs. 1,000 and costs.Both parties appealed, and a Bench of this Court (consisting of theChief Justice and my brother Wood Renton) allowed defendant’sappeal, and dismissed the action with costs. In the present reviewMr. Bawa limited himself to asking that the judgment of the DistrictJudge be restored.
Although in setting out the terms of the arrangement withdefendant dated May 2,1905, which is the foundation of the action,plaintiff only alleges that the defendant’s authority to him was to“ prospect for plumbago,” it is clear from incidental averments thatplaintiff relied upon an agreement whereby he was to enter upondefendant’s land, open and work mines, and take and appropriatethe plumbago won therefrom, yielding to defendant as “ groundshare ” (i.e., the landowner’s share) one-tenth of such plumbago.He alleges that he opened and worked a mine, and then, averringthat the mine is the property of himself and “ four employes ofdefendant,” in the proportion of two-thirds to himself and one-thirdto them, proceeds to state his cause of action, viz., that defendantsince an unascertained date between April 1 and August 14, 1906,“ unlawfully and fraudulently refuses to allow the plaintiff to stepinto the said land even.” The plaintiff then alleges that but fordefendant’s wrongful act he could have worked the mine for atleast two years and taken out about 200 tons of plumbago worthRs. 20,000 at an expense of about Rs. 6,000, and “ plaintiff’s interestin the said mine being two-thirds, exclusive of the ground share ofone-tenth,” assesses his damages at Rs. 8,000, which he prays thatdefendant be condemned to pay. The basis of this action beingplaintiff’s present right to enter upon the land and work the mine, theplaint was defective for not showing what the period covered by theagreement of 1905 was, and that that period was still current. If itwas intended to imply that plaintifE was to go- on for ever or untilthe plumbago was exhausted, that circumstance would be materialin ascertaining the application of the Ordinance of Frauds. Theagreement by which plaintifE waB to be entitled to enter upon theland and win and remove all the plumbago in it, appropriating
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nine-tenths himself and rendering one-tenth to the defendant, was ISOS.clearly an agreement for creating an interest in the land. Not being March 2.attested by a notarial instrument as required by Ordinance No. 7 vTbndt jof 1840, section 2, it was of “ no force or avail in law.” Consequentlyplaintiff’s action founded upon it must fail. I entirely agree withthe view taken of this point by the judgments under review.
The doctrine of “ part performance ” has never been recognizedin Ceylon to the extent to which it prevails in English Courts ofEquity, where (as I understand it) the fact of a part performanceby one party entitles him, in order to prevent a fraud upon him bythe other, to prove the terms of the contract and obtain as fullrelief for its breach as be could have recovered if there had beena formal writing. For one thing the terms of the two Statutes aredifferent: in England “ no action shall be brought ” on the informalagreement—words which do not avoid the contract, while in Ceylonthe contract is of “ no force or avail in law.” The principle ofcases like Hunt v. Wimbledon Local Board1 would seem to apply, inwhich the Courts have refused to admit the doctrine of part perform-ance where the contract was of no avail owing to omission of theprescribed formalities. There is one solitary local case, reportedBam. (1864) 83, in which a man who had let his land on a parolagreement that was obnoxious to section 2 was held entitled torecover compensation from the hirer for the period of his actualuse and-occupation of the land. The Court expressly guarded itselffrom deciding that every part performance takes a case out of theStatute, and the decision has never since been extended.
Mr. Bawa contended that plaintiff and defendant were partners,and that that being established he was entitled to show byparol evidence what the partners! interests were in the land. Herelied upon Forster o. Hale,2 Dale v. Hamilton.3 But the actionwas in no sense founded on a partnership. The averment thatdefendant’s “ employes ” were co-shareholders with plaintiff didnot imply that they were employed to represent defendant in thebusiness of the mine. If there was a partnership, the transfer bytwo of the partners of their shares to defendant would primd faciehave worked a dissolution of that relation, rather than madedefendant a partner with the others ; and paragraph 7 ohthe plaint,unequivocally accepts defendant’s disclaimer of interest, and st,atesas the basis of the action that the mine is the property of the plaintiffand the four others. There is no prayer for dissolution, or. forpartnership accounts. There is no suggestion in the issues (whichplaintiff himself formulated and defendant agreed to) that defendantwas his partner at any time. Upon the evidence I agree in holdingthat no partnership was proved.
I have had the advantage of perusing the Chief Justice’s draftjudgment, and I concur with him as to the time limit and as to
1 L. R. 4 O. P. D. 48.* 3 Vesey 636 ; 6 Vesey 308.» ZPhiUvps 266.
1969.
March 2*
Wendt J.
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plaintiff’s claim for “ compensation for improvements ” and fordamages ex dolo mato.
I think we should affirm the judgment under review with costs.Middleton J.—
The plaintiff in review seeks the reversal of this Court’s judgmenton the question of an alleged partnership between him and thedefendant, or in the alternative that he is entitled to recoverdamages from the defendant either on the ground that the allegedcontract between the parties has been partly performed and so comeswithin the equitable doctrine followed by the Court of Chancery inEngland, taking it out of the purview of Ordinance No. 7 of1840, or on the ground that there has been such dolus mains onthe part of the defendant that plaintiff is entitled to compensation.
I do not think it necessary to consider at any length the firstcontention, as the judgment of my lord and my brother WoodBenton, with which I entirely agree, and the plaint (paragraph 7)very clearly show that no partnership existed or was even allegedby the plaintiff to exist in the initial step of these proceedings. Iwould go further even than my brother and say that if the note takenby the learned District Judge is correct, the case was not at firstopened as a case of partnership, but rather as an action for damages,and there is no claim for the taking of an account on the footing of apartnership set out in the plaint. The questions, therefore, I think,we have to decide are whether the plaintiff is entitled to succeedon either of the two latter grounds raised by his learned counsel.
The doctrine of part performance is, I take it, one which the Courtsof Equity in England adopted when circumstances disclosed that ifthe Court held that no action would lie under the Statute of Frauds,its pleading and enforcement would work great injustice by reasonof allowing one party who bad been equally negligent of its obser-vance as the other to take advantage of his own wrong and obtain anunjust aggrandisement at the expense of the other. If the doctrinewere carried out under all circumstances, it would practically lead toa repeal of a legislative enactment of great use and importance, andI do not think in admitting it as apart of our law, which has beendone in the case of Perera v. Fernando,l decided in 1864, we shoulddo so without jealously regarding the facts of each case. This is aruling of three Judges, and as such is binding on this Court byvirtue of the decision of the Full Court in Robot el al. v. De Silva etal.,* in spite of the later judgment of 1887 reported in 8 S. C. C. 67.
We are not, I think, to make the Ordinance the instrument of.fraud itself, nor to allow a person in pari delicti) to enrich himselfat the expense of b>s co-delinquent. The usual remedy granted
by the Courts of Equity in .Englahd in such cases is a decree forspecific performance, but this yifl only be granted if the Coux|b is(.1863-msS3.*• (1907) 10 27. L. H, 140.
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able to ascertain the terms of the agreement satisfactorily (Svgden’sVendors and Purchasers 154). This leads me to consider what arethe terms of the alleged agreement here as set out in the pleadings.So far as the plaint is concerned there is a mere averment of anauthorization by the defendant to the plaintiff to prospect forplumbago on the defendant’s land with a recital that plaintiff,having given a declaration as required by Ordinance No. 11 of 1896,sunk a three cubits mine on defendant’s land, and that plaintiffagreed to pay defendant one-tenth of the output as ground share.There is no averment of any lease, or that the license was to con-tinue for any specified period of time, nor are any conditionswhatever averred in the plaint as attached to the alleged agreement.
The defendant pleads a covenant that the plaintiff worked themine in question under a promise that if there was a cessation ofwork for three months continuously on the part of the plaintiff,the defendant was to have the right of refusing the plaintiff fromresuming work (sic), and as the plaintiff had abandoned the pit foreight months continuously, the defendant, as he lawfully might,refused to allow the plaintiff to resume work. The plaintiff avers apart performance in the working of the mine at a loss and the paymentof the ground share, but the time for which the mine was worked orwas to be worked is not alleged. The omission as regards the timelimit and of any terms as regards the land, which could be construedas an agreement for a lease to the plaintiff by the defendant, seem tome to negative the plaintiff’s right to any relief by way of specificperformance. If, moreover, there was nothing more than a merelicense to prospect, which seems to me the case from the avermentsin the plaint, I cannot see that any action for damages will lie.
The plaintiff does not even aver that the defendant agreed toallow him to open the mine, or that he was to continue working itfor any specified length of time. On the assumption, therefore,that the plaintiff had an agreement with the defendant, which wasnot governed by the Statute of Frauds, I do not think that on thepleadings any case is shown, upon proof of which the plaintiffwould be entitled to damages as against the defendant. There isno alleged breach of an agreement to lease. At the most theplaintiff avers an authority to go upon the land for a specified purposewithout any limitation as to time, which is a mere license revocableat the will of the grantor. There is no averment in the pleadingsthat on the faith of the authority to mine the plaintiff has gone toany great expense in excavating or in mining plant or otherwise.The only averment is that by reason of the withdrawal of tkoauthority the plaintiff will be unable to excavate plumbago in largiquantities at little expense, being thereunto unlawfully and fraudulently prevented by the defendant from taking advantage of thtmining operations he has already, engaged in! It seems to me,however, that a license to prospect and mine for plumbago is a
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March 2.
.Middleton
J.
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1909.
March 2.
Middleton
J.
promise for establishing an interest in land, which would comeunder section 2 of Ordinance No. 7 of 1840. –
This brings me to the question of dolus modus and the authoritycited from the Digest {Book 4, Tit. 3, Sect. 34), which is translated atpage 225 of Monro’s translation:—“If you give me leave to quarrystone on your land, or to dig for chalk or sand, and I thereupongo to expense in the matter, but you refuse after that to let me takeanything away, the only action that will apply in the case is thaton dolus modus. ”
The defendant here has allowed the plaintiff to take someplumbago away, is he to be permitted, on the ground of part per-formance, to raise the question whether he has been fraudulentlyand oapriciously prevented from taking all the advantage he wasentitled to under the authority granted to him, and if so, what is themeasure of his damages ?
It is not fully apparent, on the face of the pleadings, that theplaintiff has been fraudulently or capriciously prevented fromcontinuing his mining, or that he has suffered any damage at all,and assuming as I do that section 2 of Ordinance No. 7 of 1840must govern the law in the Digest so far as it might affect theposition of parties subject to the Roman-Dutch Law in Ceylon,I do not think there is any room for holding that the doctrine ofpart performance is to take the case out of the Ordinance, so as toentitle plaintiff to maintain an uncertain action ex dolo rnodo, whenhe is clearly barred by the Ordinance.
. The following cases were relied on by counsel for the appellantand respondent, and I have gone through them all .—Perera v.Fernando1 Cowell v. Watts,2 Forster v. Hale,3 In re de Nicols. DeNicolsv. Curlier,4 Say too v. Kalinguwa el ad.,6 Silva v. Gunewardene,8Mudiansev. Mudianse,1 Young & Co. v. The Mayor and Corporationof Royal Leamington, Spa,* Powell v. Lovegrove,9 Nunn v. Fabian,™Pain v. Coombs,1' Elias v. Jeronis,12 Samnahamy v. Silva,™ Hunt v.Wimbledon Local Board,1* Cha/rles v. Romaliya et of.,15 Secretary ofState for War Department v. Ward,™ Gray v. Smith.1'
I have dealt with the case on the pleadings as counsel for theappellant submitted that at least some case for relief was disclosedupon them; I am unable to find any. As regards the question ofestoppel, I cannot see how it can be relied on when the plaintiffhimself in paragraph 7 of his plaint (Jisclaims any partnership. Iwould dismiss the appeal with costs.
Judgment in appeal affirmed.
i Ram. (1863-1868). 83-8 2 Hall and Twells. 224.3 S Vesey, 308.
* {1900) 2 Chancery 410.*SS.C. 0. 67.
8 2 Browne 202.
8 2 N. L. R. 86.
8 L. R. 5 App, Cased 517.
• 8 De Qex M. and G. 357.
10 L. R. 1 Chancery Appeals 35.» 1 De Qex J. 34.
38 7 S. C. C. 71.
>3 Ram. 11860-62), 101.
38 4 C. P. D. 56.
38 2 N. L. R. 255.
18 2 Browne 256.
r 43 Chancery Division 208.