Sivasambu v. Kaihiresar Ambagar
Present: Gratiaen J. and Gunasekara J.S. SIVASAMBU et al., Appellants, and KLATHIRESAR• AMBAGAR et al., Respondents
S. C. 496—D. C. Jaffna, 652
Contract—Transfer of property—Condition for reconveyance—Provision for damageson refusal to reconvey—Is obligation of transferee alternative ?—Specificperformance—Trusts Ordinance, s. 93.
Whoro property is transferred subject to the terms that the transferee shouldreconvey it to the transferor upon payment of a certain price within a stipulatedperiod and that, on refusal to reconvey, the transferee should pay a certain sumas damages, action for specific performance of the reconveyance would lieat the instance of the transferor if the promise to pay damages representsmerely a penal stipulation which is nothing more than accessory to the princi-pal obligation. If, on the other hand, the promise to pay damages introduces intruth an alternative obligation at the transferee’s option, it is open to the trans-feree to discharge the contract by complying with either (and not both) of thealternative obligations stipulated in the contract.
PPE AL from a judgment of the District Court, Jaffna.
N. E. Weerasooria, Q.C., with C. Shanmuganayaf,am, for the 4thdefendant appellant..
U.W. Tambiah, with V. Ratnasabapathy, for the plaintiffs respondents.
Cur. adv. vult.
GRATIAEN J.—Sivasambu v. K.a'hirasar Ambagar
May 28, 1952. Gkatiaen J.—
By a deed No. 15,600 dated 17th September, 1941, the 1st, 2nd and 3rdplaintiffs sold the land to which this action relates to Poothar Sittampara-pillai for a consideration of Rs. 5,300. The deed contingently providedfor a reconveyance of the property to the plaintiffs (or to their nomineeThambipillai) upon the following conditions :—*
“ We do farther declare that if we jointly and severally or Thambi-pillai Nalliah of Udduvvi with our consent, pay the consideration ofRs. 5,300 with interest thereon at the rate of 6£per cent. p.a. within3 years of the date hereof and ask for a transfer at our expense the saidSithamparapillai or his heirs and administrators should transferthe said lands without any objection and if they refuse to executeaccordingly should pay a sum of Rs. 2,700 as damages. We do herebyfurther declare and bind ourselves that if we fail to pay the said princi-pal and interest within the time prescribed and obtain a transfer ofthe said lands from him or from his aforewritten the said lands do belongto the said Sithamparapillai and his heirs after the said period withoutasserting any right, title or interest from the said lands. ”
The learned District Judge has held, and I accept his finding, that thesum of Rs. 5,300 and interest had been duly tendered to Sithamparapillaiwithin the time stipulated. Nevertheless, the reconveyance asked forwas “ refused ” and Sithamparapillai sold the property shortly afterwardsto the appellant for valuable consideration in terms of Deed No. 1,222dated 20th September, 1944.
In the present action the 1st, 2nd and 3rd plaintiffs and Thambipillaisued Sithamparapillai for the execution of a conveyance in terms of theoriginal agreement, and the appellant was added as a party defendantwhen his subsequent purchase was disclosed. The stipulated consider-ation was deposited in Court by the plaintiffs to the credit of the action.
Some of the original parties died dining the pendency of the proceedings,and the substitution of their representatives in interest has contributed tothe long delay in arriving at a final determination of the litigation.
The learned District Judge has correctly held that, by virtue of the pro-visions of Section 93 of the Trusts Ordinance, such rights as had vested inthe plaintiffs and in Thambipillai under the deed No. 15,600 againstSithamparapillai have become legally enforceable against the appellantas purchaser of the property. He also took the view that, upon a properinterpretation of the deed, an action for specific performance did lie. Adecree against the appellant was entered upon that footing.
For the purposes of this appeal it is necessary to examine and construethe language of the clause which I have quoted. If, as the learnedDistrict Judge has held, Sithamparapillai had undertaken without quali-fication to reconvey the property upon payment of the agreed price withinthe stipulated period, and if his promise to pay Rs. 2,700 merely represen-ted a penal stipulation which was merely accessory to the principal obli-gation, then an action for specific performance of that principal obligation
GRATlABN J.—Sivasambu v. Kathiresar Ambagar
lay at the instance of the 1st, 2nd and 3rd plaintiffs and/or of Thambi-pillai with their consent. If, on the other hand the stipulation for the pay-ment of Rs. 2,700 introduces in truth an alternative obligation at theobligor’s option it was clearly open to Sithamparapillai (or his sueeessor-in-title) to discharge the contract by complying with either (and not both)of the alternative obligations stipulated in the deeds.
The principle under consideration has been explained by Pothier onObligations1 in the following terms :—
“ An alternative obligation is contracted when a person engages todo, or to give, several things in such a manner that the payment of one willacquit him from all …. In order to constitute an alternativeobigation, it is necessary that two or more things should be promiseddisjunctively. When they are promised conjunctively, there are as manyobligations as the things which are enumerated, and the debtor cannothe wholly liberated without discharging them all ; but when they arepromised in the alternative, though they are all due, there is but oneobligation which may be discharged by the payment of any of them.The choice belongs to the debtor. ”
The method of approach laid down by Pothier exactly corresponds withthat indicated in Fry on Specific Performance 2 where reference is madeto a class of contract in which “ the sum named is an amount the paymentof which may be substituted for the performance of the act at the electionof the person by whom the money is to be paid or the act done ”. As washeld in Roper v. Bartholomew 3 “ the Court must in all cases look for theirguide to the primary intention of the parties as it may be gatheredfrom the instrument upon the effect of which they are to decide, and forthat purpose to ascertain the precise nature and object of the obligation
Our attention has been drawn to a number of earlier decisions of thisCourt where similar problems of interpretation have arisen, vide MathesAppuhamy v. Raymond 4; Appuhwmy v. Silva 5 ; Paiva v. Marikar 6 andBe Silva v. Senaratne 7. As I read these judgments, they have all adoptedthe test which Pothier lays down, but in each case the language of thedocument under consideration differed widely from the language of thoseconstrued in the others. With respect I think that, so long as the trueprinciple is borne in mind, the interpretation (right or wrong' of anyparticular words appearing in one written instrument is seldom of muchassistance as a precedent for deciding the true meaning of some otherwritten instrument.
Having given my best consideration to the language of the deed15,600 dated 17th September, 1941, I have reached the conclusion thatSithamparapillai had bound himself and his successdfs-in-title either toconvey the property “ without any objection ” upon due paymentof the agreed consideration or, should he “ refuse ” to fulfil that particular 1
1 Vol. 1, page 136 (Article 6 Paragraphs 245-247).4 (1896) 2 N. L. R. 270.
* (5th Ed.) page 68 Section 142.6 (1914) 17 N. L. R. 238.
8 12 PRI. 821 (147 E. R. 880).6 (1936) 39 N. L. R. 255.
i (1949) 50 N. L. R. 313.
GRATIAEN J.—Sivasambu v. Kathiresar Ambagar17$
obligation, to pay instead a sum of Rs. 2,700. I am quite unable to sub-scribe to the view that both these promises were made conjunctively in thesense that failure to fulfil the first obligation exposed him to the duty tofulfil them both. In this particular context the word “ and ” is not in-consistent, I think, with the idea of disjunctive promises. Finally, theword “ refuse ” seems to negative to some extent the view that the alter-native obligations provided by the agreement were enforceableat the option of the proposed purchasers of the property.
Fry on Specific Performance 1 refers to the authority of Hobson v. Trevorwhich is not available to me, for the proposition that “ where the amount ofpenalty is small, as compared with the value of the subject of the contract,it is a reason for treating the sum reserved as a mere penalty, and not inthe nature of analtemative contract”. It seems to me that a stipulation for asubstantial payment may reasonably be accepted as some indication thatthe parties intend to provide for an alternative obligation at the debtor’soption. In the present case, the plaintiffs could hardly have been in aposition in September, 1941, to persuade Sithamparapillai to bind himselfto pay so large a sum, in proportion to the contract price, either as apenalty for securing the performance of a single and compellable obliga-tion or even as liquidated damages, payable at the purchaser’s option, inthe event of its breach. The plaintiffs must have been pressed for moneyat the time of the transaction, and presumably they could not prevail uponSithamparapillai to pay them Rs. 5,300 except as consideration a salerather than a mortgage of the property. Having secured an absolute transferin his favour, he agreed either to reconvey the property in exchange for thatsum, together with reasonable interest if paid within 3 years or, in effect,to increase the amount of the original purchase price from Rs. 5,300 to around sum of Rs. 8,000. The language of the deed does not suggest to mymind any other acceptable theory as to how precisely the sum of Rs. 2,700could have been arrived at by agreement between the parties.
In the view which I have taken, the claim for specific performance of thefirst alternative obligation, namely, the promise to convey the property, isnot enforceable by the plaintiffs as of right. The other alternative obli-gation to pay a sum of Rs. 2,700 therefore became enforceable uponSithamparapillai’s refusal to convey the property, and Mr. Weerasuriyaconceded that this obligation has now passed to the appellant. I wouldaccordingly substitute for the decree entered in the Court below a decreeordering the appellant to pay the 1st, 2nd and 3rd plaintiffs a sum ofRs. 2,700 with legal interest thereon from the date of the institution ofthis action until payment in full. Subject to this, the appellant is entitledto his costs both here and in the Court below, the aggregate amount ofwhich must upon taxation be deducted from the sum payable by him tothe plaintiffs under this decree.
Gustasekara J.—I agree.
Appeal allowed.. >