SEMAN v. SILVA

103-NLR-NLR-V-18-SEMAN-v.-SILVA.pdf


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Present: Ennis J. and De Sampayo J.
SEMAN v. SILVA.95—D. C. Matara, 8,656.
Prescription—Notarial lease—Rent due prescribed in eta fear$ undersection 7 of Ordinance No. 22 of 1871—Meaning of the t/nn“ bond"—Stampduty—Debt not inventoried in testamertary
proceedings—Case struck off the roU to enable pUdntifi to regularizehis position.
A notarial lease is awritten contractoragreement withinthe
meaning of section 7 of Ordinance No. 22 of 1871 f and the periodof limitation inregard toan action fortherecovery of rentdue
’ thereon is six years.
Db Sampayo J.—The word “ bond '* is used in Ordii&nce No. 22of 1871 exactly in the same sense as in the earlier enactments, andan instrument should be construed as a bond or not acoordingto its substanceand realcharacteristics,andnot according toits
form of .execution.
Where plaintiff had not inventoried the debt for the recoveryof which he was suing in the testamentary proceedings, and paidstamp duty thereon, the case was struck off the roll to give him anopportunity to regularize the proceedings.v
THE facts are stated by De Sampayo J. as follows: —
By a notarially-executed lease dated October 8, 1902, oneBalasuriyage Laisahamy demised to the defendant a certain landfor a term of eight years commencing from January 1, 1908, at a
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rental of Rs. 50 a year. The rent for three years was received inadvance, and it was stipulated in the lease that the defendant should4>ay the annual rent for the remaining five years on January 1efcoh year, and iij default of due payment should pay the samewith interest at nine per cent. The lessor, Laisahamy, died leavinga last will by which she appointed the plaintiff nx executor and solelegatee. In that capacity the plaintiff has sued the defendant forthe recover^ of the sum of Rs, 422.50, being the amount of rentfor the five years commencing from January 1, 1906, with interestthereon up to date of action. The defendant pleaded payment ofthe whole rent to Laisahamy during her lifetime, and»he also raisedtwo legal defences, namely, (1) that the claim was barred by pre-scription, and (2) that this alleged asset of Lais&hamy’s estate nothaving been inventoried in the testamentary case, and no stampduty thereon having been paid, the plaintiff could not maintain thisaction. The District Judge held on the issue of prescription thatthe instrument of lease was a ** bond ” within the meaning of section6 of the Ordinance No. 22 of 1871, and the claim was therefore notprescribed, and that .the second objection was well founded, buthe allowed the plaintiff time to move iu the testamentary suit lorthe purpose of including the debt among the assets of the estateand paying the extra stamp duty; and he further ordered thedefendant to pay the plaintiff the costs of the day. The defendanthas appealed.
Ba>wa> K.G. (with him Keuneman), for appellant.
A. St. V, Jayctvardene, for respondent.
Cur. adv. vult.
August 31, 1915. Enxjs -I.—
The plaintiff, as legatee midev the will of one Laisahamy, suedthe defendant for the rent of certain lands.
The defendant pleaded payment, and that the claim was pre-scribed. He also asserted that the plaintiff could not maintain theaction, as the sum had not been inventoried in the testamentary suit.
Issues were framed, and the parties heard on all except the issueas to payment. The learned District Judge found, on the issueof prescription, that the claim for rent came within section 6 of theOrdinance No. 22 of 1871, holding the rent due on a notarialiyexecuted bond conditioned for the payment of money. He theufound that the plaintiff could not maintain the action until thedebt was inventoried in the testamentary 6uit and the duty paidthereon; he struck the case off the roll, to give the plaintiff anopportunity to regularize the proceedings, and ordered the plaintiffto pay the defendant the costs of the day (June 30, 1915).
The defendant appeals, and objection has been taken that theappeal is premature, as there is no final order. The counsel for
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the appellant, however, abandoned the issue as to payment, inorder that $ie dispute between the parties might be finally settledon the appeal.,c
In the Full Court ease, De Silva v. Don Louisf the question fordecision was whether claims for rent on notarially-exeouted instrumentsfell within section 7 or section 8 of the Prescription Ordinance,No, 22. of 1871, and it was decided that they fell withiq section 7.It was not suggested in that- cate that such claims might comewithin the terms of section 6; so, strictly speaking, that point hasnot been decided; but, as the Court was then dealing generallywith prescription in plums for rent, the case is,* in my opinion, asufficient authority for the proposition that such claims when basedon a notarially-executed instrument fall only within section 7 of theOrdinance.
1M#5.Earns JT«
Counsel for the respondent argued, however, that such a claimcomes within section 6, and he cited the cases of Tissercu v. Ties era,1Suppramaniapillai v. Kalikutty,* Suihukkummdh v. Vachchiravageeand another,* and an unreported case (191—D. C. Negombo, 9,375 ‘)in support of his argument. In my opinion none of these oases 'is a -sufficient authority for the proposition, as in all of them thedocument sued upon contained some provision for securing there-payment of money or a penalty for non-payment in due time,and on that account only these oases might be said to come withintiie terms of section 6. In Tissem v. Tisscra1 Bonser C.J., discussingthe meaning of “ bond conditioned for the payment of money, ”found in section 6, said: “In English law a bond means a deedpoll whereby .the obligor Binds himself to pay money or do someact. Being a deed it must be under seal. Now, in this Island theparties to instruments do not authenticate them by affixing theirseals … It seems to me that the attestation of an instrumentby a notary may be regarded as a solemn act equivalent to theformality of the affixing of their seals by the parties to an Englishdeed. So that in this Island a deed may be defined as a writingattested by a notary, and a bond as the acknowledgment of or promiseto pay a debt in an instrument attested by a notary.”
Chief Justice Bonser then proceeded to hold that the expressionmeant a bond “ given for securing the payment of money.”
I am unable to agree with the contention that this case is anauthority for the proposition that a document notarially executed,containing merely a promise to pay money, is a bond “ conditionedfor the payment of money.” In my opinion the expression refersonly to documents in which there is a condition that money is tobe paid by way of security. Again, as pointed but in Chinnatambyv. Chanyiugam-,* Chief Justice Bonser’s definition of the word “ deed ”
1 4 S. C. C. 89.
(1896) 2 N. L. B. 238.
(1908) 11 N. L. B. 71.
(1909) 12 N. L. B. 289.
S. C. Mins., July 16, 1914.
1 Cut. L. R. 136.
tm.Bm}.Samoa v.
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as applicabfe to Ceylon was merely a dictum, and was inadequate to-interpret the expression “ deed oi partnership ” found in sectionas there is no law in Ceylon which requires agreements for part-,nership to be nofcarialty executed. Moreover, as pointed out byMr. Bawa, the formalify oi “ notarial execution ” .was not alwaysrequire between 1884 and 1871 in cases in which it would now berequired. In my opinion .the lease under which rent is claimed inthis case is not a " bond conditioned for the payment of money, ”and that it falls under section 7, and not section 6'of the OrdinanceNo. 22 of 1871. Thd claim is therefore prescribed, except as to. thelast instalment of rent, Bs. 50, which was due withifl six years ofthe institution of the suit.
The question as to whether the action can be maintained till thedebt is inventoried is covered by .the authority of Silva v, Weera-suriya and the learned District Judge was right in allowing theplaintiff an opportunity of getting the grant duly stamped.
I would not interfere with the order made, but as the appellanthas partly succeeded, I would order each party to bear its own costson appeal and for the day, June 30, in the Court below.
De Sampayo J.—
[His Lordship set out the facts, and continued]:—
Dealing with the latter point first, I think the District Judge wasright in giving the plaintiff an opportunity to have the probate dutystamped, and so satisfy the requirements of section 547 of the CivilProcedure Code. It has been frequently laid down that, where aplaintiff found himself unable to .proceed with an action for wantof letters of administration to a deceased person’s estate or probateof his will, the proper course was to suspend the action in order toenable the plaintiff to obtain letters or probate, and I cannot seewhy where probate has actually been taken out, any defect as tostamps may not be rectified in the same wav.
The*more substantial ground of appeal is that relating to thequestion of prescription, and I think that here the holding of theDistrict. Judge is erroneous. The vexed question as to what is a“ bond ” was again argued in this case, but I am not inclined torevive the old controversy, except so far as it may.be necessary tonotice an argument of Mr. A. St. Y. Jayewardene for the defendant,to the effect that every written agreement to pay money, providedit is notarialfy executed, is a/' bond ’’ within the meaning of section6 of Ordinance No. 22 of 1871. This argument is founded on thejudgment of Bonser C.J. in Tissera v. Tisaera,* where the learnedChief Justice said that as a bond in English law was a deed poll,whereby the obligor bound himself to pay money, and as notarialattestation in Ceylon might be regarded as a solemn act equivalent i
i U N. L, R. 7$.* (1896) 2 N. L. ff. 238.
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to the formality of affixing %t seals to an English deed, a “ bond ”*W5. ^
in this Island might be defined as “ the acknowledgment of or pro-g^tAYO
mise to pay a debt in an instrument attested by a notary.*’ IJfls J.opinion, however, cannot be taken as. the ratio dtcidendi of the case. Sem^v,The question was whether the document there construed was a $ * Silvapromissory note or a bond, it was quite clear from thtf natureof the document itself, apart from the form of its execution, that itwas not a promissory, note, but was in the nature of a bond; andtins, I think, was the ground of the judgment of Lawrie J., who tookpart in the decision. The fact of notarial execution, if I may sayso with respect, has. nothing to do with the character of a documentas a bond in Ceylon, as may be seen from the history of the legislationon the subject of prescription. The earliest enactment is theRegulation No. 13 of 1822» which by section 4 provided that <( noaction shall be maintainable upon any instrument of hypothecationor mortgage, or upon any 'bond or other deed under seal, unless suchaction shall be brought within^ten years from the date thereof orof the last payment of interest. ** The words I have italicizedappear to be indicative of the foot that, in the early days of British.administration, English legal language and ideas prevailed to a largeextent, and so the Regulation No. 5 of 1825, after reciting thatdoubts had arisen “ whether bonds not being sealed by the obligor(of which nature are in general all bonds passed in this Island) comeunder the description of bonds specified in the 4th clause of Regula-tion No. 13 of 1822, ” proceeded to declare and enact that “ all andevery instrument of hypothecation, or mortgage, or bond, con-ditioned for the future payment of money or the performance ofany agreement or trust, or payment of any penalty . .. whether
notarial or not notarial, and whether under the seal of the obligoror not, provided the same be otherwise executed according to law,shall be considered as an instrument of hypothecation, or mortgage,or bond of the class of instruments specified in the 4th clause ofRegulation No. 13 of 1822.** Then came the Ordinance No. 8 of1834, which amended and consolidated the law in force regulatingthe prescription of actions. 8ection 3 of this Ordinance adoptedthe language of the above Regulation as to instruments of hypothe-cation, mortgage, or bond, “ whether notarial or not, and whetherunder the seal of the obligor or not.” These words, it is true, arenot repeated in the existing Ordinance No. 22 of 1871; but it mustbe remembered that in the interval the Ordinance No. 7 of 1840 hadbeen enacted, by which the instruments which required notarialexecution were defined and fixed. The effect of this latter Ordinanceas regards bonds was to require notarial execution only in the caseof bonds which created an interest in immovable property, so thatit was no logger necessary or proper to repeat in the OrdinanceNo. 22 of 1871 the words " whether notarial or not.” As regardstiie omission of reference to sealing, I take it that by the year 1871
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191ft it was well understood that the formality of sealing was not appli-Pa ftuMDrAyo cable to Ceylon, and to provide that a document might be a bondJ. without being under seal was perceived «to be a useless precaution.
Stn&^v. What reason is therS now to assume fetters against which the. Legis-picture had taken so much*oare and trouble to give special waromg?In my Opinion the word “ bond ” is used in the existing Ordinanceexactly in the same sense as in the earlier enactments, and aninstrument should be construed as a bond or the contrary accordingto its substance and real characteristics, and not according to its formof execution. Of course, in the case of b&ods affecting an interestin land, the want of notarial execute will make it invalid to thatextent under the Ordinance No. 7 of 1840, but in other oases I thinknotarial execution or the absence of it is of no consequence. If theOrdinance No. 22 of 1871 intended to depart radically from theprevious enactments and to define all bonds to be notarial instru-ments, nothing was easier than to say so. Assuming, however,that Tissera v. Tissem 1 decided that every bond was an obligationto pay money or do some act contained in a notarial instrument, itis no authority for saying that every notarial instrument containing,an obligation to pay money or to do some act is a bond. What-ever a bond may be, I am quite sure that a lease is not a bond.Its main purpose is not to secure the payment of money, but tovest the right of possession of a land for a certain period in thelessee. A lease also usually contains many subsidiary covenants,and simply because one of .these covenants relates to the paymentof rent, the instrument is net thereby constituted a bond. If therent is paid wholly in advance there will be no such covenant in thelease at all, and in such a case there will be no shadow of reason forcalling it a bond. A lease belongs to the specific class of contractswhich the civil lav/ calls locatro conduction and in no way partakesof the nature of a bond, ^s the stipulation in this lease was topay the rent with interest in .the case of default, Mr. Jayewardenefurther argued that it came within section 6 of the Ordinance, as a“ bond conditioned for the payment of a penalty.” But interestin the ordinary .sense is not a penalty. It is the profit payable tothe person, who is entitled to the principal sum, as compensationfor the delay. In my opinion the' rent payable under a notariallease is not governed by the period of limitation provided in section6 of the Ordinance. A notarial lease, in my opinion, is a writtencontract or agreement within the meaning of section 7, and theperiod of limitation in regard to an action for the recovery of rentdue thereon is six years. Moreover, .this matter is not wholly resIntegra; it is, I think, covered by the authority of the Full Court-decision in Silva v, Don Louis.2 No. doubt the principal point inthat case was as to the effect of the word “ rent ” in section 8, butit was definitely decided that a notarial lease was a written contract* (2696) 2 N. L. R. 238.2 (2882) 4 S. C. G. 88.
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or agreement in. .the contemplation of section 7; and that the period£815.
of limitation for an action for rent due under such a lease was shtSamPayo
jeacs. No doubt,also, section 6 wasnot discussed thereataS;
but it is inconceivable' that if section6 had any bearingonthe sen^nv
question, the eminent Judges who took gart in the decision would 9 <>stiva *not have considered it. It seems to me that the whole question ofprescription was fully before the Court, and I think the decision isa binding authority in the present case. I may add that .the matterhas always been considered in the sense determined in that decision,and that, so far as I know, this is the first .time that rent due on awritten lessens sought to be brought within section 6 of the Ordinance.
In my opinionthe plaintiff's claimis, under section 7ofthe
Ordinance No. 22of 1871, prescribed,except as to Es. 50 which
became due on January 1, 1910. I would send the case back to* be proceeded with on that footing, and I agree to the order as tocosts proposed by my brother Ennis.
Appeal dismissed.