Acceptance of a sum paid into court in full satisfaction of a claim does not constitute an admission of the grounds of the defendant's defense nor does it create an estoppel against the plaintiff regarding allegations of negligence.

Lord Buckmaster:-

There are two questions raised upon this appeal, one as to the effect of taking out of Court money which has been paid in, in full satisfaction of a claim, and the other as to whether or no the respondent, who is a solicitor, has been guilty of negligence in his professional conduct of the appellant's business.

The case arises in this way. The appellants are a firm of builders who carry on business at Nairobi in the East African Protectorate. On 27th November, 1911, they entered into a contract with a company incorporated under the English Company's Act under the name of East Africa and Uganda Corporation Lim., for making certain additions and alterations to the Norfolk Hotel, at Nairobi. Disputes arose between the appellants and the company with regard to the payment for the work which they did, and attempts were made to get the matter settled by reference to arbitration. The respondent was instructed and retained by the appellants as solicitors to act for them in connection with these disputes, and, after various abortive attempts to get the company to agree to arbitrators and to proceed to arbitration in the usual way, an agreement was in fact executed between the appellants and the attorney of the company agreeing that the matter should go to arbitration. An arbitration was accordingly held, and on 3rd August, 1914; a sum of Rs. 30,283 was awarded to the appellants. The company then proceeded to move the High Court to set aside the award upon the ground that the agreement to refer the dispute to arbitration was not under their seal, but had been made by their attorney, who was unable to bind them in such a matter.

On 26th November, 1914, Bonham Carter, J., by whom the application was heard, decided that this contention was right, and he ordered the award to be set aside. On 20th September, 1916, the respondent and his partner issued a plaint in the High Court against the appellant, Frederick Tate, as the principal partner in the appellants' firm, claiming payment of a sum of Rs. 4,149 for professional services rendered to the appellants, including their services in connection with this arbitration. In the defence to that case the appellant picked out certain items in respect of which he admitted that he was liable, brought forward certain claims for payments made to the company for costs as the result of the abortive litigation, paid into Court a sum of Rs. 772 made up in respect of matters for which he admitted liability, as to the balance of the claim said that the respondent's services had been of no value owing to his negligence; he further stated that payments had been made and unascertained damages incurred by reason of the respondent's negligence in not obtaining the seal of the company to the agreement to refer, and that the right to sue in respect thereof was reserved.

The payment into Court was made under Rules 376 and 377 of the Rules of Civil Procedure. Rule 376 provides that in a suit to recover a debt or damages the defendant may deposit in Court, such sum of money, as he considers a satisfaction in full of the claim; notice has to be given of that deposit to the plaintiff. Rule 377 then provides that upon the plaintiff receiving such notice, two courses are open to him; either he may accept the amount in satisfaction in part of his claim and prosecute his suit for the balance, or he may accept the amount in satisfaction in full of his claim and present to the Court a statement to that effect. In this case the respondent took the latter of the two alternatives, and sent a notice to the Registrar in these terms :

"Take notice that the plaintiffs accept the sum of Rs. 772-5-0 paid into Court by the defendant, in full satisfaction of their claim, dated this 20th day of October, 1916,"

and judgment was entered accordingly.

The appellants subsequently instituted the proceedings out of which this appeal has arisen, claiming that the respondent had been guilty of negligence in permitting the agreement to