CALCUTTA HIGH COURT
Fleming & Ors. - Appellant
Versus
Shearman - Respondent
Decided On : 01-06-1870
Acknowledgment - Debt - Limitation Act XIV of 1859, Section 4 - An acknowledgment in writing of a debt must contain an admission that a debt is due. Ambiguous words in a letter, such as "remittance of 40 to old account", do not necessarily import that a further sum is admitted to be due and are not sufficient to give a new period of limitation.
Fact of the Case:
The defendant was sued on a promissory note for rupees 1,000 with interest at 12% per annum. The defendant argued that the suit was barred by the Law of Limitation. The plaintiff relied on a letter written by the defendant acknowledging two debts, including the one in question, to support their claim.
Finding of the Court:
The court found that the letter written by the defendant did not contain a clear admission of the debt being due. The words "remittance of 40 to old account" were deemed ambiguous and not sufficient to constitute an acknowledgment under Section 4 of Act XIV of 1859.
Issues: Whether the letter written by the defendant constituted an acknowledgment of the debt under Section 4 of Act XIV of 1859, thereby preventing the suit from being barred by the Law of Limitation.
Ratio Decidendi: Section 4 of Act XIV of 1859 requires an acknowledgment in writing to contain an admission that a debt is due. The court held that the ambiguous words in the letter did not constitute such an admission. The court also held that parol evidence is admissible to explain a latent ambiguity, but it cannot be used to create an ambiguity where none exists.
Final Decision: The court modified the decree by deducting the amount barred by the Law of Limitation and ordered each party to bear their own costs.
JUDGMENT
Sir Richard Couch, Kt., C.J. - We are of opinion that there was sufficient evidence of the payment of the bills by the plaintiffs. There is no question that the bills were drawn against the consignments, and the defendant in his evidence said, "I got the proceeds of the bills drawn against the shipments, which bills I sold to banks; no demand has been made on me as the drawer of those bills; I have received no notice of the dishonor of those bills." If the bills had been refused acceptance, and the plaintiffs after signing their names as acceptors had cancelled the signatures and kept the bills in their possession, as it has been suggested by the defendant's counsel might have been done, the defendant must in the ordinary course of things have received notice of the dishonor, or some demand would have been made upon him by the banks. If the goods had been sold by or on account of the holders of the bills in consequence of the non-acceptance of them, the defendant must have had some notice of it. The correspondence shows, and the fact cannot be doubted, that the goods were sold by the plaintiffs, which they could not have done if they had not accepted the bills. The fair inference from the facts proved, and the production of the bills by the plaintiffs at the hearing is, that the bills were accepted and returned to the indorses, and were afterwards paid by the plaintiffs. We also think that the plaintiffs were right in their contention, that, in determining whether they were entitled to treat the goods as a consignment, each invoice was to be taken separately.
2. (His Lordship here read some portions of the correspondence to show this was the intention of the parties in the arrangement. He referred to the plaintiffs' letters of March 19th, and April 3rd, 1866, remarking of the latter: "There was here a clear intention that each invoice would be taken separately, and there is no remark or remonstrance from the defendant that this was not what he intended." He referred also to the defendant's letter of March 8th, the defendant's letter of January 26th, 1866, the plaintiffs' of April 26th, and continued.) In the case of the Elphinstone cuttings, the plaintiffs made a concession to which the defendant was not entitled, and it does not show what was the general agreement. The case now put forward by the defendant is at variance with the letters which passed between the parties at the time of the transactions, and it is from these letters that we can most safely collect what was the understanding between them. The next matter we have to consider is the shipments by the Ganges and Belle Isle, and the question between the parties as to these is disposed of by a reference to the correspondence. In his letter of 23rd September 1865, the defendant advises the shipment of 668 bales of jute cuttings which was made on his own account. On the 3d of November, the plaintiffs wrote to the defendant asking whether they might take the shipment by the Ganges on their own account, which was assented to by a letter of 22d December. On the 18th December, the plaintiffs wrote to the defendant: "With the cuttings per Belle Isle we have not yet done anything, there not having been much demand for such goods of late. We think it may perhaps be best to let them arrive, as cuttings ought to be favorably affected by the high prices for jute; but we shall be guided as to this by the course of events, and in any case you may depend upon our doing for the best according to our judgment." This letter, which must have been received after the defendant had assented to the plaintiffs taking the shipment by the Ganges on their own account, tells him they do not intend to do so with the shipment by the Belle Isle, and the defendant made no reply claiming that they should do so. His assent with regard to the Ganges shipment had no such qualification annexed to it as he now sets up. Even if we thought it fair that the plaintiffs should take on their own account
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