A KB AH S.P.J.—Silva v. Leiris Appu.
1936Present: Akbar S.P.J. and Koch J.
SILVA v. LEIRIS APPU.164—D. C. (Inty.) Tangalla, 2,838.
Judgment-debt—Appropriation of payments by judgment-debtor after decree—Principle of Roman-Dutch law.
The rule of the Roman-Dutch law that a payment by a debtor shouldbe applied by the creditor to the liquidation of the most onerous partof the debt has no application to a judgment-debt.
^^PPEAL from a judgment of the District Judge of Tangalla.
L. A. Rajapakse (with him Olegasegaram), for defendant, appellant.
N. E. Weerasooria, for plaintiffs, respondent.
Cur. adv. vult.
July 3, 1936. Akbar S.P.J.—
By mortgage decree dated August 15, 1929, the defendant-appellantwas ordered to pay Rs. 882 being principal and interest due on a mortgagebond with interest at 9 per cent, from date of decree till date of paymentand also costs of the action. In default of payment of this amount,interest, and costs on or before August 31, 1929, the mortgaged propertywas to be sold and the proceeds applied towards the payment of the.amount, interest, and costs. On January 30, 1930, the application ofthe plaintiff for execution of decree was allowed. The amount mentionedin the application was Rs. 1,031.42, which was made up as follows:Rs. 882 (amount of principal and interest in decree), Rs. 33.48 (interestfrom date of decree till date of application), and costs Rs. 115.94. Thisorder to execute the decree was recalled, as defendant had made a partpayment on the decree of Rs. 250 on March 19, 1930. On March 16,1931, plaintiff again applied for execution for Rs. 862.20, which wasmade up as follows; Rs. 781.42 (being the difference between Rs. 1,031.42and Rs. 250), Rs. 77.18 (being interest from January 22, 1930, to March14, 1931, on Rs. 781.42), and Rs. 3.60 (costs for the reissue).
The defendant again made a part payment, of Rs. 250 on May 29, 1931,and the order to execute was again recalled. The defendant madefurther payments of Rs. 250 on June 21, 1931, and Rs. 100 on August31, 1932. On October 12, 1932, plaintiff applied for execution for the
KOCH J.—Silva v. Leiris Appu.
balance then due of Rs. 327.59. Objection was taken to this applicationon the ground that the part payments should have been set off, as theywere made against the more onerous portion of the decree, viz., Rs. 882,which was liable to interest and not as against the full amount of thedecree including costs which were not liable to payment of interest.The District Judge ruled against the defendant, hence this appeal. Inmy opinion the appeal fails on two grounds. In the first place thepart payments were made after the issue of the ofider for execution, .anddefendant had full notice of the manner in which the plaintiff was apply-ing the part payment as he had indicated this in his application forexecution dated March 16, 1931.
In spite of this application which is in the record, the defendant madethree further payments of Rs. 250, Rs. 250, and Rs. 100 on May 29, 1931,June 21, 1931, and August 31, 1932. In the next place although theRoman-Dutch law is clear that part payments should be set off againstthe more onerous debt when the debtor is indebted on two or moreobligations, I do not think this will apply to a judgment-debt whichcomprises and is made up of two or more debts, some of which are moreonerous than the others- The judgment-debt is one debt and the orderfor execution issued to the Fiscal or Commissioner is in effect an orderto levy one sum, which is found to be due on the date of demand by thatofficial, whatever the component parts of this lump sum may be or inwhatsoever a manner they may be made up.
Under the Roman-Dutch law (which will be found in 2 Nathan, p. 593;Morice’s Roman-Dutch Law, p; 97) the debtor has the choice of indicatingto his creditor to which debt the part payment is to be appropriated.There was no such evidence in this case. In the absence of any suchindication the appropriation would be set off against the more burden-some debt. This rule cannot, I think, be applied to the case before me,which was a case of one judgment-debt, although made up of themortgage debt carrying interest and the costs which were not liable tointerest. The debt is one whole debt which gets its efficacy from thedecree of the Court, which decree clearly stated that if the sum due on aparticular date was not paid, the sale was to be carried through.
For the reasons stated by me the order of the District Judge appearsto me to be correct and the appeal will therefore be dismissed with costs.Koch J.—
A somewhat novel point arises for decision on this appeal and that iswhether tne Roman-Dutch law on the subject of appropriation of pay-ments as between creditor and debtor applies once a decree has passedin favour of the creditor-plaintiff. It is postulated by Mr. Rajapaksethat it does. The point arises in this wise. The plaintiff-respondentobtained a hypothecary decree with interest and costs. Certain partpayments were made by the defendant to the plaintiff who placed themagainst cc ,.s in the first instance. The defendant argues that theyshould have been primarily placed against the principal debt in thedecree which carried continuing interest and not against the costs whichdid not carry any interest at all. Now it is clear that our Common lawin regulating appropriation of payments stresses considerations of
KOCH J.—Silva v. Leiris Appu.
advantage to the debtor (Voet XLVI. 3, 26; Pothier III. 1, 7; RamanathanChetty v. Sarkunam'), and in doing so appropriates a payment to the mostonerous debt. It is equally clear in the present case that under thedecree in question that that part of it which includes the money claim andinterest is more onerous than that part for costs, but can it be sadd thatthe rules of appropriation apply even after a decree has been entered ?I think not, for I feel that these rules were intended to govern the con-tracting parties so long only as actual contractual relations exist. Oncethe intervention of a Court has been sought and once a decree has beenentered, the contractual relations are determined and the liability of oneto the other is no longer under the contract but under the decreewhich takes its place, and which is the formal expression of the resultsarrived at by the judgment (Fernando v. The Syndicate Boat Co., Ltd').The parties thereupon pass out of the domain of contract and enter thatof a decree. Once this happens the Common law ceases to operate sofar as the decree holder’s executory powers are concerned, and the pro-visions of the Civil Procedure Code come into play. Unfortunately aparty in whose favour a decree has been made is designated a judgment-creditor and a person against whom such a decree has been entered iscalled a judgment-debtor (section 5, Civil Procedure Code). This has ledto a confusion of ideas owing to the terms “creditor” and “debtor”being still maintained. A less ambiguous expression would have been“ decree holder ” and party against whom a decree is entered. TheCode however, in section 217, sets out various types of decrees andincludes decrees other than those to pay money, for example, a reivindicatio or possessory decree without damages, a decree for divorcewithout alimony or damages, &c. We can therefore conceive of instancesof decrees that have to be obeyed or executed, into which moneyobligations do not enter and yet £he holder of such a decree may legallybe styled a judgment-creditor. I therefore think that that argument ofMr. Rajapakse is unconvincing. The code provides for the executionof decrees and for their satisfaction. The former step is through theFiscal who, according to the terms of section 226, after receiving thewrit is obliged to call on the judgment-debtor and require him to paythe amount of the writ, a tender by the judgment-debtor of anythingshort of this amount must be rejected—a requirement which the ordinarycreditor is not bound by. Again, in the case of entire or partial’ satis-faction of the decree no such adjustment, unless certified under section349 in the record, is recognizable by the Court different from .paymentto and acceptance by a creditor during the pendency of his contract.Also any claims or remedies, or any payments or other defences underthe contract that the creditor or debtor has failed to advance at thetrial which preceded the decree cannot be raised after the Court haspronounced on the contract (section 207 of the Civil Procedure Code).The relevancy of these observations is to indicate that the Common lawrelations of the parties appear to be at an end at the moment a decreeis entered and fresh rights and obligations emerge from under thedecree which can only be enforced procedurally in terms of the CivilProcedure Code.
* 2 N.L. R. 106
1 15 N. L. R. 334.
MACDONELL C.J.—Somasunderam v. Attorney-General.
I therefore agree with my brother that the rules of appropriationunder the Roman-Dutch law do not apply to the case of 3 judgment-debt.I also agree with my brother’s remarks in regard to the effect of the noticethe appellant had of the manner in which the respondent had been applyingthe part payments made by the appellant after decree. The appeal failsand must be dismissed with costs.
SILVA v. LEIRIS APPU