Rampala and Others v. Moosajees Ltd. and Another
RAMPALA AND OTHERS
v.MOOSAJEES LIMITED AND ANOTHER
COURT OF APPEAL
ATUKORALE. J. (P/CA) AND G. P. S. DE SILVA. J.
A. (S.C.) NO. 344/74<F)
C. COLOMBO NO. 76039/M13. 14 JUNE 1983.
Contract — Agency — Liability of agent — Unjust enrichment — Absence ofaverment re unjust enrichment in plaint or issues or submissions — Goods soldand delivered — Prescription — Prescription Ordinance. S. 12 —
The plaintiff-respondent (Moosajees Ltd.) filed this action against WhittalBoustead Ltd. (1st defendant) and 2nd defendant (Rampala) and 3 to 8respondents — 2 to 8 defendants being co-owners of Blackwater Estate — torecover money due on fertilizer supplied. The suit was on 2 causes of action, thefirst cause of action was a claim solely against the 1st defendant on the basisthat the fertilizer was ordered by the 1 st defendant Co. itself undertaking to pay.The second cause of action was on the footing that the 1 st defendant acted asagent for 2 to 8 defendants.
The District Judge held that the 1st defendant had ceased to be the managingagents of the estate after 31.3.69 and not liable for orders after that date and inany event both causes of action were prescribed. However he proceeded to givejudgment for plaintiff on the ground of unjust enrichment despite absence ofpleadings or issue or submissions.
The District Judge was in grave error in the total absence of pleadings andissues and in view of the course of proceedings and the basis of thepresentation of the cast at the trial, in making a finding in favour of the plaintiffon the ground of unjust enrichment at the stage of judgment.
The statement in P10 by the 1st defendant, namely "immediately we hearfrom them (2 to 8 defendants), we will let you know what arrangements havebeen made with regard to the repayment of the outstanding account"constitutes an acknowledgement of a debt from which a promise to pay the debtcould reasonably be inferred.
From the evidence and the sequence of the letters, it could be said that WhittalsEstates and Agencies Ltd. were agents of the proprietors of the estate and wereduly authorised to make the acknowledgement of the debt within the meaning of
Sri Lanka Law Reports
(198312 Sri L. R.
section 2 of the Prescription Ordinance and the acknowledgement in P10 wassufficient to take the case out of prescription.
Cases referred to:
Peiris v. The Municipal Council. Galle 65 NLR 555.
Perera v. Wickremaratne 43 NLR 141.
APPEAL from judgment of the District Judge of Colombo.
H. L. de Silva. S.A. with Gomin Dayasiri for 2 to 8 defendant-appellants.
H. W. Jayewardene. Q.C.. with L. C. Seneviratne and Lakshman Perera forplaintiff-respondent.
K.N. Choksy, S.A. with Lakshman de Alwis for 1 st defendant-respondent.
Cur. adv. vult
20 July 1983.
P. S. DE SILVA. J.
The plaintiff-respondent (Moosajees Ltd.) instituted this actionon 22nd February. 1972 against Whittall Boustead Ltd., the 1stdefendant-respondent, and the 2nd to the 8th defendants-appellants. the co-owners of an estate called Blackwater Estate,for the recovery of a sum of Rs. 135.178/21 on account offertilizers sold and delivered to them during the period whichended 27th September. 1970. According to the statement ofaccount marked 'A' filed with the plaint, a sum ofRs. 105,765/60 represented the value of the fertilizers and thebalance sum of Rs. 29,712/61 represented interest which theplaintiff claimed had accrued from time to time.
The plaintiff's claim was based on two causes of action. Thefirst cause of action was a claim for the said sum solely againstthe 1 st defendant on the basis that the fertilizers were ordered bythe 1st defendant and that the 1st defendant undertook to makepayment for the goods. In other words, the 1st defendant
CA Rampala and Others v. Moosajees Ltd. and Another (G. P. S. de Silva. J.) 443
contracted personally and was personally liable. Paragraph 4 ofthe plaint, reads thus :—
"Upto the 27th September. 1970, at the request of the1 st defendant and on the undertaking to pay the plaintiffthe price or value together with interest at 12% perannum on money overdue for a period exceeding threemonths, the plaintiff sold and delivered to the 1stdefendant goods (fertilizer, etc.) for which an aggregatesum of Rs. 1 35,478/21 is due and payable from the 1stdefendant as shown in the statement of account marked'A' filed herewith and pleaded as part and parcel of thisplaint."
The second cause of action was an alternative to the firstcause of action and the plaintiff averred that, at all material times,the 1 st defendant acted as agent for and on behalf of the 2nd tothe 8th defendants, and that the said cohtractfor goods sold anddelivered, has been made by the 1 st defendant as an agent of the2nd to the 8th defendants who were the principals. Accordingly,the 2nd to the 8th defendants were jointly and severally liable inthe said sum of Rs. 135,478/21.
The position of the 2nd to the 8th defendants as set out intheir answer was :—
that the 1st defendant in entering into the contracts forthe purchase of fertilizer, did not do so as agents of the•2nd to 8th defendants;
that the 1st defendant only is liable on such contract tothe plaintiff..
As regards the first cause of action set out in the plaint, thetrial Judge held
"On the evidence, there is not a slightest doubt that the1 st defendant acted as the agent of the proprietors ofBlackwater Estate"
Sri Lanka Law Reports
 2 Sri L R.
Since the contract which'was made by the 1st defendant wasmade only in its capacity as the managing agents of the estate,the trial Judge held that the 1st defendant was not liable. TheDistrict Judge also held that since the 1 st defendant had ceasedto be the agent as from 1 st April. 1 969. it would not be liable fororders placed after that date and that orders made upto 31stMarch. 1969 amounted to Rs.. 34,637/03. The trial Judgefurther held that even this claim was prescribed and that thedocuments P8. P10 and P18 pleaded in paragraph 5 of theplaint, did nof have the effect of taking the case out ofprescription.
In regard to the second cause of action which was against the2nd to the 8th defendants, the trial Judge held that thesedefendants were liable as principals in respect of all ordersplaced on their behalf by the first defendant as well as by thesucceeding agents, namely. Whittalls Estates and Agents Ltd. Thetrial Judge, however, held that the claim based on the alternativecause of action was prescribed in law and that neither P10 norP18 constitutes a promise to pay the debt so as to take the caseout of prescription.
The District Judge having thus dismissed the claims based onboth the first cause of action and the alternative cause of action,proceeded to hold that the 2nd to the 8th defendants were liableto the plaintiff on the ground of unjust enrichment in a sum ofRs. 105,765/60. The 2nd to the 8th defendants have nowappealed against the judgment entered against them on thatbasis.
Mr. de Silva, Counsel for the 2nd to the 8th def6ndants-appellants. strongly urged that the District Judge was in graveerror in entering judgment for the plaintiff on the basis of unjustenrichment. With this submission I agree. It is important to notethat
(a) nowhere in the plaint was there a single averment onsuch basis;
CA Rampala and Others v. Moosajees Ltd. and Another (G. P. S. de Silva. J.) 445
neither at the commencement of the trial nor during thecourse of the trial, did Counsel for the plaintiff evenattempt to raise an issue on the ground of unjustenrichment: even if it was sought to raise such issue onthe first date of trial, the cause of action on that basiswould by then have been prescribed;
even at the stage of written submissions which weremade after the evidence was concluded, the plaintiff didnot suggest a claim founded on the plea of unjustenrichment;
Explanation 2 to section 1 50 of the Civil Procedure Code,does not permit a party "to make at the trial, a casematerially different from that which he has placed onrecord and which his opponent is prepared to meet".
Mr. Jayawardene, Counsel for the plaintiff-respondent, reliedon the case of Peiris v. the Municipal Council of Galle (1) andcontended that the trial Judge was justified in giving judgmentfor the plaintiff on the basis of unjust enrichment. This was acase where the Municipal Council of Galle had employed a firmof architects to construct a Town Hall. The Municipal Councilhad paid only a part of the money due to the firm Of architects forwork done and the Council was sued for the balance amount.The District Judge held that the architects had performed theirpart of the contract but dismissed the action on the ground thatthe contract was void as it was not under seal. Thambiah, J„however, in appeal, held that the trial Judge should have framedan issue of "unjust enrichment" and should have tried it. Thecase was remitted to the District Court for that issue to be tried.For the purposes of the appeal before us, however, what isrelevant is that Thambiah. J. took the view that "the plaint hasbeen drafted in such a manner that all the averments necessaryto raise the issue of undue enrichment are contained therein"(65 N.L.R. at 556). This case, therefore, could be distinguishedfrom the appeal before us.
Sri Lanka Law Reports
/1983j 2 Sri L. R.
I accordingly hold that having regard to the total absence ofpleadings and issues, the course of the proceedings and thebasis of the presentation of the case at the trial, it was not opento the District Judge at the stage of judgment, to find in favour ofthe plaintiff on the ground of unjust enrichment.
Mr. Jayewai*dene. however, submitted that the District Judgehas wrongly answered the issues relating to prescription and thatthe plaintiff was entitled to judgment in its favour. Mr. de Silvadid not canvass the finding of the District Judge that the plaintiffsold and delivered fertilizers to the 2nd to the 8th defendants.(Issues 3 and 4) Mr. Jayewardene conceded that the claim of theplaintiff would be prescribed but for the acknowledgment of theamounts due to the plaintiff contained in the letters marked P8,P10 and P18. Therefore, the matter that arises for decision isnarrowed down to the question, whether P8. P10 and P18constitute an "acknowledgment" within the meaning of, section12 of the Prescription Ordinance so as to take the case out ofprescription.
P8 is a letter addressed to the plaintiff by Whittalls Estates andAgencies Ltd. It is to be noted that this letter is dated 18/7/69.The period of prescription in respect of goods sold and deliveredis one year but the action having been instituted only in February1972, P8 is of no avail to the plaintiff. P18 is also a letteraddressed to the plaintiff by Whittalls Estates and Agencies Ltd.and is dated 25/5/71. However. Whittalls Estates and AgenciesLtd. were the managing agents of Blackwater Estate only till30/4/71. Therefore. P18, too. does not assist the plaintiff.
There remains for consideration P10. This is a letter dated23/3/71. written by Whittalls Estates and Agencies Ltd. to theplaintiff. It reads thus:—
We are in receipt of your letter of the 1 2th instant, withenclosure, for which we thank you.
CA Rampala and Others v. Moosajees Ltd- and Another (G. P. S. de Silva. J.) 447
The delay in effecting payment for manure supplied byyou to the above estate is regretted, and we have alreadytaken this matter up with the proprietors of the estate.Immediately we hear from them we will let you know whatarrangements have been made with regard to therepayment of the outstanding account. We wouldmention that our Chairman did not categorically statethat the sum due to you on account of manure suppliedto the above estate will be paid, but he only stated thatyou will be informed of the position on our hearing fromthe proprietors.
Per pro WHITTALLS ESTATES &AGENCIES LTD. ”
P10 is the reply to P9 which is a letter addressed by the plaintiffto the 1 st defendant, requesting payment for fertilizer supplied toBlackwater Estate owned by the 2nd to 8th defendants. In myview, the words, "Immediately we hear from them, we will let youknow what arrangements have been made with regard to therepayment of the outstanding account" in P10. constitute anacknowledgment of a debt from which a ptomise to pay the debtcould reasonably be inferred — Indeed, Mr. de Silva did notcontend to the contrary. As observed by Soertsz, J. in Perera v.Wickremeratne. (2 ):—
"It has frequently been laid down that when there is anacknowledgment of a debt without any words to preventthe possibility of an implication of a promise to pay it. apromise to pay is inferred."
Mr. de Silva, however, strenuously contended that P10 has notbeen signed by Whittalls Estates and Agencies Ltd. as agent ofthe owners of the estate and that Whittalls Estates and AgenciesLtd. have not been "duly authorized to enter into such contract"on behalf of the proprietors within the meaning of section 12of the Prescription Ordinance. Mr. de Silva submitted
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 2 Sri L R.
that the words "duly authorised" in section 12 of the PrescriptionOrdinance, mean specifically authorised to acknowledge thedebt. A general authorization would not suffice, was Counsel'scontention.
To consider these submissions, it is necessary to refer to theevidence. P3 is an order dated 21/4/69. addressed to theplaintiff by Whittalls Estates and Agencies Ltd. for and on behalfof the proprietors of Blackwater Estate. It was agreed at thetrial, that all orders placed after 1 /4/69 when Whittalls Estatesand Agencies Ltd. took over the management of the estate, weresimilar to P3. Coomaraswamy who was Chairman of the 1stdefendant-company as well as Whittalls Estates and AgenciesLtd., stated in evidence
that Whittall Boustead Ltd. (1st defendant) ceased to beestate agents, as from 31.3.69 and that the estate agencyfunctions were taken over by Whittalls Estates andAgencies Ltd.,-as from 1/4/69 and continued torepresent the estates which were previously managed bythe 1st defendant; that when the transfer took place, theestates were informed of the change and there was also apress notification;
that he discussed with the 2nd defendant (Rampala) andthe 4th defendant (Dharmasena), the question of thepayment of moneys due to the plaintiff on account offertilizer supplied to Blackwater Estate;
that the 2nd and 4th defendants told him that they wouldmake arrangements to obtain the money;
that by P15, a letter dated 30/12/70. Whittalls Estatesand Agencies Ltd., had informed the plaintiff that
"we are arranging a conference with the proprietors ofthis estate (Blackwater) and look forward to being able towrite to you after we have ascertained their wishes inregard to the future of this property.".
CA Rampala and Others v. Moosajees Ltd. and Another (G. P. S. de Silva. J.) 449
Apart from the oral evidence of Coomaraswamy, P10 has to beconsidered in the context of the other documentary evidence, inparticular 1Dn and 1D12- 1Dn is a letter dated 26/2/71,written by Whittalls Estates and Agencies Ltd., to the 4thdefendant who according to the evidence, "was the personhandling matters on behalf of the estate". 1 Di 1 reads thus
We refer to the discussions we had with you andMr. Rampala, in this office on the 9th of January this year.You then agreed to discuss the question of Blackwaterfinances with your Co-owners and advise us thereafter ofthe proposals you have in mind.
We trust that you have now discussed this matter withyour Partners, and await your early reply.
WHITTALLS ESTATES & AGENCIES LTD. "
1D12 is a letter dated 1/3/71. written by the 4th defendant toWhittalls Estates and Agencies Ltd. It reads as follows:—
" BLACKWATER ESTATE
I am in receipt of your letter dated 26th February, 1971for which I thank you.
The question of Blackwater finances was discussed, asper your suggestion with the Co-owners of the estate.They are of opinion that in view of the present criticalsituation of the country and that they are also financiallyin great difficulty, it is impossible to finance the estate forfuture management.
In these circumstances, they have decided to sell theestate and settle the debts.
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 2 Sri L. R.
In this connection, I have already made somearrangements and if it is successful I will let you know.
B. D. Dharmasena. "
On a consideration of the above evidence and the sequence ofthe letters 1 Di 1. 1 D12 and P10. I am of the opinion that WhittallsEstates and Agencies Ltd., were agents of the proprietors of theestate and were duly authorized to make the acknowledgmentcontained in P10. It is to be noted that none of the defendants-appellants gave evidence, denying the authority of WhittallsEstates and Agencies Ltd., to address P10 to the plaintiff.Moreover, the defendants-appellants in their written submissionsfiled in the District Court, have stated thus
"The 2nd and 8th defendants are the owners ofBlackwater Estate. The 1 st defendant was the managingagent of the said estate from 1.11.63 until 31.3.69 andMessrs. Whittalls Estates and Agencies Ltd., was themanaging agent of the said estate from 1.4.69 to 1.5.71on the terms and conditions set out in 2D4.".
I accordingly hold that Pjo constitute an acknowledgment ofthe debt by an agent "duly authorized" and is sufficient to takethe case out of prescription. However, as submitted by Mr. deSilva. Whittalls Estates and Agencies Ltd., had no authority toacknowledge debts prior to 1.4.69. The finding of the DistrictJudge was that the orders made up to 31/3/69 amounted toRs. 34.637/03. This finding was not challenged before us. Theamount payable to the plaintiff by the 2nd to the 8th defendantswould, therefore, be reduced to Rs. 71,128/57 with legalinterest from date of action.
CA Rampala and Others v. Moosajees Ltd. and Another (G. P. S. de Silva. J.) 451
The plaintiff-respondent is entitled to a decree in the said sumof Rs. 71.128/57 with legal interest from date of action againstthe 2nd to the 8th defendants-appellarits and we direct that thedecree entered be awarded accordingly. Subject to the saidamendment of the decree, the appeal is dismissed. The 2nd tothe 8th defendants-appellants must pay the full costs in theDistrict Court and half costs of this appeal to theplaintiff-respondent.
ATUKORALE. J.—I agree.
with reduction in decreed amount.