IN THE HIGH COURT OF MARAS
S Aiyar, Spencer
Puliyadi Navanna Ellarayan
Versus
Kuttuva China Kuna Muni Nagendra
Decided On : 14 March, 1917
Interest - Contract of Sale - Sections 52, 54 of the Contract Act, Section 55(4)(b) of the Transfer of Property Act - Greenwood v. Churchill (1845) 8 Beav, 413: 14 L. J. Ch. 143: 9 Jur. 196 50 E. R. 162: 68 R. R. 180 - Jones v. Gardiner (1845) 8 Beav, 413: 14 L. J. Ch. 143: 9 Jur. 196 50 E. R. 162: 68 R. R. 180 - Adusumilli Singarayadu v. Sayani Narayanasami 17 Ind. Cas. 273: (1912) M. W. N. 915 - Monck v. Huskisson (1827) 4 Russ. 121 note, 5 L. J. Ch. (o. s.) 163. 1 Sim. 280: 57 E. R. 682. - Esdaile v. Stephenson (1822) 1 Sim. & St. 122: 57 E.R. 49: 24 R.R. 151 - Muthia Chetty v. Sinna Velliam Ohelty 10 Ind. Cas. 662. 35 M. 625: (1911) 2 M. W. N. 228: 9 M. L. T. 378: 21 M. L. J. 236
Fact of the Case:
Plaintiff sold a house with partial interest, sued to recover interest from the date fixed for performance of the contract up to the date when he took the balance of Rs. 1,700 out of Court. District Judge dismissed the suit citing the sale-deed superseding the contract and plaintiff's own default in payment.
Finding of the Court:
District Judge found that the contract of sale was superseded by the sale-deed and plaintiff's default in executing the indemnity bond disabled him from insisting upon the payment of the balance of the purchase-money.
Issues: Whether the sale-deed superseded the contract, and whether plaintiff's default in executing the indemnity bond disabled him from insisting upon the payment of the balance of the purchase-money.
Ratio Decidendi: The sale-deed did not supersede the contract, but a subsequent oral agreement modified the terms. Plaintiff's default in executing the indemnity bond disabled him from insisting upon the payment of the balance of the purchase-money.
Final Decision: Plaintiff's suit was dismissed, and the second appeal was also dismissed with costs.
Spencer, J.
1. The plaintiff sold for Rs. 2,000 a house in which he had only a partial interest, the remainder belonging to his brother who did not join in the contract to sell or in the sale-deed. Rs. 300 were paid in advance by the purchasers. Plaintiff brought this suit to recover interest from the date fixed for performance of the contract up to the date when he took the balance: of Rs. 1,700 out of Court. He succeeded,; in the first Court, but on appeal the District Judge dismissed his suit for two reasons:
(1) That the stipulation for payment of interest occurs only in the contract to sell and not m the sale-deed and that the latter must be treated as superseding the former, both documents having been executed on the same day.
(2) That plaintiff was himself the cause of the default in payment.
2. The stipulation for interest in Exhibit B is worded thus:
3. "In the event of your failing to pay the said sum of Rs. 1,700 after my executing the sale-deed by the said term you shall pay me at my demand the principal and interest by calculating interest at one and a half per cent, per mensem from date of default". This evidently indicates the intention of the parties that it should take effect after the execution of the sale-deed. It relates to a matter upon which the sale-deed is silent. It is not possible to gather from the documents that the par-ties intended in the later document to avoid the condition already agreed to in the former document as to payment of interest. I am unable, therefore, to support the learn-ed Judges conclusion on the first point.
4. On the second point I think we must accept the finding of fact. It is argued that the legal consequence as to the defendants not being liable for interest does not follow, and, the case of Greenwood v. Churchill (1845) 8 Beav, 413: 14 L. J. Ch. 143: 9 Jur. 196 50 E. R. 162: 68 R. R. 180. and some observations in Section 1412 of Fry on Specific Performance, page 682 (5th Edition are quoted by appellants Vakil in favour of the view that the purchaser will not be released from the obligation arising from an express condition that he should pay interest. In Greenwood v. Churchill (1845) 8 Beav, 413: 14 L. J. Ch. 143: 9 Jur. 196 50 E. R. 162: 68 R. R. 180. the sale-deed provided that interest should be paid, "if any delay arose from, any cause whatever" The Master of the Rolls thought that the express terms of the contract could not be altered and that the purchaser was liable but without prejudice to any application he might make for compensation. On the other hand in Jones v. Gardiner (1845) 8 Beav, 413: 14 L. J. Ch. 143: 9 Jur. 196 50 E. R. 162: 68 R. R. 180., where the condition was that the purchaser should pay interest for delay if he made default and it was in fact found that the delay occasioned was the fault of the vendor, it was held, referring to Denning v. Henderson (1848) 17 L. 3. Ch. 8. 1 De G. & Sm. 689: 12 Jur. 89: 75 R. R. 249. that the purchaser could not be made to pay interest for delay.
5. In Adusumilli Singarayadu v. Sayani Narayanasami 17 Ind. Cas. 273: (1912) M. W. N. 915. the vendor failed to give a good title to the property till long after the date fixed for the execution of the conveyance and the payment of consideration. The Judges, of whom my learned brother was one, refused to enforce the stipulation contained in a collateral agreement that interest should be paid by the purchaser from the day specified for payment of the consideration for the sale. They referred to the case of Monck v. Huskisson (1827) 4 Russ. 121 note, 5 L. J. Ch. (o. s.) 163. 1 Sim. 280: 57 E. R. 682., in which under similar circumstances Leach, V. C., declared that the stipulation for interest would not make interest run before the time when a good title was shown, but would only affect its rate. This English decision has been doubted (See Fry, Note to Section 1413) as being difficult to reconcile with another pronouncement by the same Vice Chancellor in Esdaile v. Stephenso
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