Soosaipillai v. Vaitalingam.
1935Present: Dalton S.P.J. and Maartensz J.
SOOSAIPILLAI v. VAITALINGAM et al.
308—D. C. Jaffna, 3,355.
Prescription—Action on joint promissory note—Payment by one co-debtor—Interrupts prescription in favour of the other—English Common Law—of Exchange Ordinance, No. 25 of 1927, s. 97 (3).
A payment by one of two joint-debtors on account of’ principal andinterest takes the debt out of the Prescription Ordinance as againstthe other.
HE plaintiff sued the defendants to recover a sum of money as pairtcapital and interest due on a promissory note made by the
defendants jointly in favour of one Emmanuel Pillai and endorsed tothe plaintiff for valuable consideration. The note was made on August26, 1924. On December 10 the first defendant paid the plaintiff a sum ofmoney in part payment of the principal and interest. The first defendantfiled no answer and the plaintiff obtained judgment against him. Thesecond defendant filed answer in which he pleaded that no paymenthad been made on the note and that the action was prescribed asagainst him. The learned District Judge held that a payment hadbeen made and that it arrested prescription as against the seconddefendant.
P. Tiyagarajah, for second defendant, appellant.—The makers of thenote are liable “ jointly ” (Chalmers Bills of Exchange, 9th ed., p. 319).Payment by the first defendant did not arrest the running of time againstthe appellant (Chalmers Bills of Exchange, 9th ed., p. 349, 2 K. B. 933(1918) ). The claim on the note is prescribed as against the appellant(section 13 of Ordinance No. 22 of 1871). This section is identical in termswith section 1 of the Statute of Frauds (Amendment) Act, 1828 (9, Geo. IV.c. 14). See the Mercantile Law Amendment Act, 1856 (19 & 20,Viet. c. 97), section 14. Although section 97 (3) of Ordinance No. 25 of1927 repeals section 2 of Ordinance No. 5 of 1852, section 92 (2) ofOrdinance No. 25 of 1927 restores the provisions of section 2 ofOrdinance No. 5 of 1852. Section 92 (2) of Ordinance No. 25 of 1927has been given as wide an interpretation as section 2 of Ordinance No. 5of 1852 (see Ponniah v. Kanagasabai1). In any event section 98 (2) ofOrdinance No. 25 of 1927 was not intended to repeal the law ofprescription as regards payment by the joint-maker of a note.
A. Rajapakse (with him H. N. G. Fernando), for plaintiff, respond-ent.—The terms of section 98 (2) of Ordinance No. 25 of 1927 are clear.This introduces only the Common law of England and not the Statute law.At common law part-payment by a joint-contractor arrested pres-cription as against the other contractor (see Lindley on Partnership.
9th ed., p. 337; Burleigh v. Stott1; (1871) 2 Doug. 652).
» 33 N. L. Ji. 128.
– 8 B. A C. 36.
DALTON S.P.J.—Soosaipillai v. Vaitalingam.
December 19, 1935. Dalton S.P.J—
|n this action the plaintiff sought to recover the sum of Rs. 3,904.16,amount alleged to be due in local currency, for part of the capital of anainterest on a promissory note for 2,000 dollars made by the first andsecond defendants jointly in favour of one P. Emmanuelpillai and en-dorsed to the plaintiff’ for valuable consideration. The note was made atIpoh, in the Federated Malay States, on August 26, 1924, and endorsedto the plaintiff a month later. On December 10, 1926, the first defendantpaid the sum of 1,250 dollars to the plaintiff in part payment of theprincipal and interest. This action was commenced on December 2,1932.
In this action the first defendant filed no answer and did not appearto defend the claim. The plaintiff accordingly obtained a decree againsthim in due course. The second defendant filed answer, in which hepleaded that no payment had been made on the note by the first defendantas alleged, and that in any event the note was prescribed as againsthim (the second defendant). Other defences were raised, which, for thepurposes of this appeal, it is not necessary to state. The trial Judgefound that the sum of 1,250 dollars was paid, as alleged by the plaintiff,and that that payment by the first defendant arrested prescription asagainst the second defendant, who was therefore liable for the amountclaimed. From that decision the second defendant now appeals.
The only matter argued on the appeal is the question of prescriptionunder the law in force in Ceylon. The period of prescription, undersection 7 of the Prescription Ordinance, 1871, is six years. Did thepayment on December 10, 1926, by the first defendant prevent theOrdinance from running in favour of the second defendant, his co-debtor?
To answer this question, it is necessary to ascertain what law isapplicable.°
By Ordinance No. 5 of 1852, which imported the law of England toCeylon in certain matters, it was enacted by section 2 that in respect of allcontracts and questions arising upon or relating to bills of exchange,promissory notes, and cheques, and in respect of all matters connected withany such instruments, the law to be administered shall be the same aswould be administered in England in the like case at the correspondingperiod. This section, however, is repealed by section 97 (3) of theBills of Exchange Ordinance, No. 25 of 1927. That Ordinance is basedupon the English Bills of Exchange Act, 1882. Section 98 (2) of theOrdinance enacts that the rules of the Common law of England, includingthe law merchant, save in so far as they , are inconsistent with the provi-sions of this Ordinance or any other Ordinance in force, shall apply tobills of exchange, promissory notes, and cheques. It will be noted howthis section differs from the provisions of section 2, Ordinance No. 5 of1852.
There is nothing in the Bills of Exchange Ordinance dealing with the•effect on the beriefits given by the Prescription Ordinance of an acknowl-edgment or part-payment by a joint-debtor, but counsel for the appellant
DALTON S.P.J.—Soosaipillai v. Vaitalingam.
relies upon the proviso to section 13 of the Prescription Ordinance.Section 13 is taken from the Statute of Frauds Amendment Act, 1823,section 1 (9 Geo. TV., c. 14). That Act was amended by the MercantileLaw Amendment Act, 1856 (19 & 20, Viet. c. 97), by section 14 of whichit was enacted that “ when there shall be two or more co-contractors orco-debtors, whether bound or liable jointly only or jointly and several iy
. . . . no such co-contractor or co-debtorshall lose
the benefit of the said enactments or any of them, so as to be chargeablein respect or by reason only of payment of any principal, interest, or othermoney, by any other or others of such co-contractors or co-debtors
” The said enactments referred to are Statutes of Limitation,
the earliest being the Limitation Act, 1623 (21 Jac. 1., c. 16).
There is no enactment in Ceylon bringing into force the provisions ofthe English Act of 1856, apart from the Ordinance No. 5 of 1852, whichprovided in section 2 that the law to be administered shall be the sameas would be administered in England in the like case at the correspondingperiod. When that section was repealed in 1927, we were thrownback upon the Common law of England on this matter. Counsel forthe appellant, however, asks us to read that Act into section 13 of thePrescription Ordinance.
Prior to this enactment in England in 1856, it would appear that asregards payment, the law on this subject, so far as this case is concerned,was that if one of serveral joint debtors paid any money on account ofthe principal and interest due from them all, the payment took the debtout of the Statutes of Limitation, not only against the debtor makingthe payment but as against all jointly liable with him. (See Lindleyon Partnership, 9th Ed.., p. 337.) This is also clearly laid down in severalcases cited in the course of the argument. In Burleigh and others v.Stott1 Lord Tenterdon C.J. in 1818 states “ Suppose the note had beenjoint only, there could not have been any doubt that a part-payment byone of the joint promisors would …. operate as an admissionby all the joint promisors that the note was unsatisfied, and therefore asa promise by all to pay the residue.” The doctrine that payment byone co-debtor took the debt out of the Statute rested on the ground thatin making the payment he acted for the others. In Whitecomb v. Whiting",which was an action on a joint and several note, executed by the defendantand three others, Lord Mansfield says, “ The question, here, is only whetherthe action is barred by the Statute of Limitations …. Payment byone is payment for all, the one acting virtually as agent for the rest ”.
There is no Statute in England, prior to the Act of 1856, dealing withthis particular matter, and the “ old law ” prior to that Act mentionedby the learned author of Lindley on Partnership at p. 337, to which I havereferred above, would appear tp be the Common law. The doctrine wascertainly applied by the Common law Courts in England, as opposed tothe Courts of Equity, and, in the absence of any provision in the Statutelaw until the amending Act of 1856, I think one is entitled to come tothe conclusion that it was part of the Common law of England. It is theCommon law of England on this question which is in force in Ceylon1 8 B. & C. 36.- (1781) 2 Douglas 652.
The King v. Paramanpalam.
since 1927, so far as bills of exchange, promissory notes and cheques areconcerned, and therefore applying that law in this case, part-paymentof the note by the first defendant operates as a payment to take the debtout of the Prescription Ordinance, as against his co-debtors, the second, defendant, also, and therefore his plea of prescription must fail.
I should like here to call attention to the provisions of section 58 (2) ofthe Sale of Goods Ordinance, No. 11 of 1896, which, so far as contractsfor the sale of goods are concerned, imports into Ceylon the rules of the“ English law ”, save in so far as they are inconsistent with the provisionsof that Ordinance. The English law there referred to is presumably theEnglish law in force at the date of the Ordinance. If that is so, it followsthat there is an anomaly in so far as the effect of part-payment by onejoint co-debtor is concerned, since in the case of a contract governed bythe Sale of Goods Ordinance the English law in 'force in 1896 applies,whilst in the case of bills of exchange, promissory notes and cheques,the English Common law applies. This may have been due to an over-sight in drafting section 97 (3) when the Bills of Exchange Ordinance wasenacted in 1927.
For the above reasons the judgment of the lower Court must be affirmedand the appeal dismissed with costs. No decree against the seconddefendant appears to have been drawn up and signed. That must be done.It seems to have been an oversight. Judgment was delivered againsthim on May 21, 1934. Thereafter on May 31 the plaintiff moved for adecree nisi as against the first defendant. This was allowed and thedecree was signed, the absence of a decree against the second defendantbeing apparently overlooked.
Maartensz J.—I agree.
SOOSAIPILLAI v. VAITALINGAM et al