094-NLR-NLR-V-15-RAMANATHEN-CHETTY-v.-SARKUMAN.pdf
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Present : De Sampavo A.J. and Pereira J.
RAMANATHEN CHETTY v. SARKUMAN.
153 and 154■—D. C. Kegalla, 3,225.
Payment—Appropriation ofpayment—Intentionmay be inferredfrom
nature of transaction—Appropriation may. be made by creditorwithout notice to debtor.
Where a debtor makes payment to his creditor, hia intention thatit should be appropriated to any particular debt or account maynot only be manifested by him in express terms, but it may beinferred from the nature of the transaction.
Pbbeira J.—Although ait appropriation by a creditor is ordinarilyan appropriation made at the moment of payment and with noticeto the debtor, yet a de facto appropriation by a creditor withoutnotice to the debtor would be binding on the former if the latterinsists on his being so bound.
fjp HE facts ave set out in the judgment of De Sampayo A.J.
Bawa. K.C., tor appellant.
A. St. V. Jayewardene, for respondent.
Cur. adv. vult.
July 30, 1912. De Sampayo A.J.—
The plaintiff, as administrator of the estate of one MuttusamyChetty, brought this action on March 21, 1911, on a mortgage bondfor Rs. 7,000 dated March 5, 1900, and granted by the defendantto the said Muttusamy Chetty. The defendant pleaded prescription.The bond is payable on demand with interest at 16 per cent., butthe plaintiff depends on an alleged payment of Rs. 6.18 on July 20,1902, on account of interset due on the bond. The questions atissue were whether the defendant paid this sum, and if so, whetherit was rightly, appropriated to the bond account.' There was nopositive evidence of payment. The only witness called for theplaintiff was Una Sinne Lebbe, who described himself as managerof Muttusamy Chetty’s boutique. He produced a ledger writtenby a kanakkapulle containing a general running account betweenMuttusamy Chetty and the defendant in respect of goods suppliedand money advanced in connection with the boutique. This bookshowed an entry under date July 20, 1902, of a payment of Rs. 6.18.Entries in books of account regularly kept in the course of businessare no doubt relevant, but section 34 of the Evidence Ordinance
1913.
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1912.
Db SampayoA.J.
RamanathenCheUy v.Sctrkvman
declares that such statements shall not alone be sufficient evidenceto charge any person with liability. Mr. Bawa, for the plaintiff,referred to a statement of the defendant in cross-examination thatin January, 1901, he paid Rs. 100, adding “ the other paymentsare correct ”. Here it was obvious that the defendant, who hadpreviously denied having paid anything on the bond, was speaking ofpayments on the general boutique account. There being no otherevidence of the payment of Rs. 6118 on July 20, 1902, I think theplaintiff has failed to prove any payment so as to take the case outof prescription and to charge the defendant' with liability on thebond. Moreover, the District Judge looked upon this entry in theledger with suspicion, as having been recently made, especially asthe daybook which was said to be in existence was not produced,and he found on the evidence that the payment relied on was notmade. In view of this finding, it is hardly necessary to go into theother question, viz., whether the payment, if made, can rightly beappropriated to the bond- The defendant appears to have beenan old customer of Muttusamy Chetty, and purchased goods andborrowed small sums of money from time to time. The ledgeraccount produced commences as far back as 1896, and is carrieddown to July, 1902, and shows sundry payments on account. Thelast entry in the account, which is the sum in question, is as follows:“ July 20, by cash Rs. 5 and Re. 1.18 to the new boutique, Rs. 6.18.It is difficult to resist the conclusion that this payment, ifmade, was for sundries purchased three days previously to thevalue of Rs. 6.18. Apart from that, the account, as I have said,is a general boutique account, and to my mind the payment wasmade under circumstances indicating that the defendant appro-priated it to the boutique account,, and not the bond account. Itis true that under date March 21, 1900, there is a debit entry,“ Amount paid on mortgage bond No. 14,158 dated 5th Rs. 7,000,”but it is immediately followed by the credit entry. “ By amountof the above deed Rs. 7,000.” This means that the loan onthe bond was taken out of the account .altogether- Anyway,there is no further reference to the bond in the account. Nointerest accruing on the bond is calculated or entered. It ishardly conceivable that such a small and odd sum as Rs. 6.18 wouldin any circumstances have been paid by the debtor, or accepted bythe creditor, to the account of a bond on which a very much largersum was due as interest at the time. It is obvious that the pay-ments from time to time-made by the defendant were on the generalboutique account, and when the payment of Rs, 6.18 was madeon July 20, 1902, I find it impossible to come to any other conclu-sion than that it was made on the same account. The law doesnot require that the intention of the debtor to appropriate apayment to a particular account should be declared in expressterms; it is sufficient if it can be inferred from his conduct at the
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time of payment, or from the nature of the transaction. The
same rule, I take it, would apply to appropriation of payments by sampayo*
the creditor himself.- From the nature of the transaction, theA.J.
course of business between the parties, and the state of the running Samanathen>
account, I find no difficulty in holding that in this case both thev’
debtor and the creditor at the time of payment and to the
knowledge of each other appropriated the Its. 6.18 to the
boutique account, if not in particular to the value of sundries
purchased three days previously. On the footing that neither party
made any particular appropriation, Mr. Bawa relied on the well-
known rule of the Roman-Dutch law that in such -a case the law
appropriates a payment to the most onerous debt, and argiied. that
the payment of July 20, 1902, should therefore be appropriated to
the mortgage account, and that consequently the bond was not
prescribed. I should say, if it were necessary to express any
opinion on the point, that this rule as to appropriation of payments
was intended to benefit the debtor, and not to make his position
worse, and that it would not be applied so as to deprive him of tEe
benefit of prescription which the law otherwise gives him. However
that may be, I think, for the reasons I have previously given, that
the plaintiff's action is barred by prescription, and his appeal should’
therefore be dismissed.
The defendant now appeals from that part of the District Judge'sjudgment which deprives him of the costs of the action. I thinkthe District Judge has given good reasons for his order as to costs,-and the defendant’s appeal should also be dismissed.
I would make no order as to the costs of the appeal.
Pereira J.—
On the evidence 1 am not prepared to hold -that it has been provedthat- the defendant actually paid Muttusamy Chetty the sum ofRs. 6-18 on July 20, 1902; but assuming that that sum of moneywas, ixi fact, paid by the defendant, it seems to me that the courseof business between the parties clearly indicates that there was atleast a tacit understanding between them that the sum should beplaced to the credit of the general boutique account between them.
From the debit and credit entries of Rs. 7,000 each of March 21,
1900, it is clear that the amount of the bond sued upon no longerformed part of that account, and, indeed, the balance of Rs. 7,840struck at the end of that account does not include the amount dueon the bond. That being so, it cannot be. said that there wasa part payment of that sum. The view I take here is that thedefendant was in reality a party to the appropriation. The Englishlaw as to appropriation of payments is in some respects differentfrom the .Roman-Dutch, but there is no reason why the rule laid*down in Young v. English,1 namely, that the intention of the person*
1 7 Bear. 10. {See English Reports, eol. XLIX., p. 965.)
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1912' making the payment may not only be manifested b,v him in expressPmmi jr. terms, but it may be inferred from the nature of the transaction,ffnnrnrmflirnno* hold • good under eirhe,however, for
Ohetty v. the sake of argument, that Ihe defendant was no party to theSarkuman appropriation, I am prepared to hold that, still, the appropriationwas binding on the plaintiff. Mr. Bawa argued that an appropriarturn by a creditor must be an appropriation in limine and withnotice to the debtor- That, no doubt, is how appropriations bycreditors are described by the authorities, but in that descriptionthey clearly refer to appropriations that are at once, binding on thedebtor as well as on the creditor. The question remains, however,whether a de facto appropriation by the creditor without notice tothe debtor is not bidding on the former, if the latter insists on hisbeing so bound. I think it is. It is quite clear from what appearsin Voet (see 46, 3, 16), Pothier (see 3, 1, 7), and all the other authori-ties, that the Roman-Dutch law on the subject of the appropriationof payments is based on considerations of advantage to the debtor.In a case cited by Nathan on The Common Law of South Africa,it is stated (see vol. II., p. 696):“The whole doctrine of the
Roman-Dutch law as to appropriation . of payments turns uponthe intention of the debtor, either express, implied, or presumed.”The authorities are agreed that in the case of an appropriation ofpayments by a creditor the application should not only be “at theinstant,” but equitable. Both these are conditions in the interestsof the debtor, and, therefore, I think it is open to him to waive eitheror both, and to hold the creditor to an appropriation which, it isproved, he has actually made, although it be that it had been madewithout notice to the debtor.
I may add that, as observed by Morice in his book on Englishand Roman-Dutch Law (p• 97, 2nd ed.), as a result of the require-ment that an . appropriation by a creditor should be equitable,he would not be allowed to appropriate a payment to a debtwhich owing to lapse of time would not, but for the payment,be recoverable.
I agree to the order proposed by my brother De Sampayo.
/Ippeal dismissed.