Palaniappa Chetty V. Mortimer

Present. Schneider J. and Jayewardene A.J.  1923

 PALANIAPPA CHETTY v. MORTIMER.

178-D. C. Kandy, 29,887.

Civil Procedure Code, s. 34-Cause of action-Debt due on account stated-Note given by eon for father's debt-Action on the note against son-Subsequent action against administrator of father's estate on account stated-Deposit-Arraha earnest money.

Towed plaintiff Rs. 4,000 on an account stated. T's son gave a note for this aura to secure the amount due by T. Plaintiff obtained judgment against T's son on the note. T died leaving an insolvent estate, and a meeting of the creditors exceeding six-sevenths in number, including plaintiff, was held, and all the creditors agreed to take a transfer of an estate in shares proportionate to their claims in discharge thereof. Plaintiff subsequently backed out, and the estate was transferred to the other creditors, leaving out plaintiff's share. Plaintiff sued the administrator on account stated for Rs. 4,000.

Held, that section 34 of the Civil Procedure Code did not bar the action, as the cause of action against T's son and against the administrator was not the same within the meaning of section 34.

Plaintiff did not forfeit the money due to him from the administrator of T's estate by reason of his backing out of the sale.

Money of the purchaser lying in the hands of the vendor, and not given as a deposit or agreed to be treated as a deposit cannot be regarded as a deposit, "earnest," or "arraha " given on the occasion of the agreement to purchase; and cannot, therefore, be forfeited if the. sale falls through owing to the default of the purchaser.

The provision of section 34 of the Civil Procedure Code, which enacts that for purpose of this section " an obligation and a collateral security for its performance shall be deemed to constitute one cause of action " refers to cases where an obligation is incurred and the collateral security is given by the same person or persons.

IN this case plaintiff sued the defendant for a sum of Rs. 4,000 on an account stated on June 15, 1918, between plaintiff and the late Thewaraya  Pillai, with interest and costs.

The defendant pleaded that the promissory note sued upon in District Court of Kandy, case No. 29,065, had been made in favour of the plaintiff in this case by the deceased Thewaraya Pillai's son, T. A. Periasamy Pillai, in satisfaction of the above debt, and that the judgment in such case No. 29,065 was a bar to plaintiff's claim.

The defendant pleaded in the alternative that the plaintiff had compromised the said claim by an agreement entered into by him on February 18, 1922, and that he was estopped by reason of such compromise from suing on the account stated.

At the trial on March 2 and 13, 1923, the following issues were framed:-

(1) Is the plaintiff debarred from maintaining the present action ?

(2) Was the plaintiff bound by his verbal consent to the proposed compromise, or was he at liberty to withdraw his consent ?

The District Judge (Dr. P. E. Pieris) held in favour of the plaintiff by the following judgment:-

It is admitted that on an account stated between plaintiff and the late Tewaraya Pillai on June 15, 1918, a sum of Rs. 4,000 was found to be due to the plaintiff. He has brought this action against the official administrator of the debtor's estate to recover the amount found so due, with interest. The claim has been met by two lines of defence, which will be dealt with separately. The first defence is as "follows : It is admitted to be the fact that the plaintiff has received from. Periyasami Pillai, the son of Tewaraya Pillai, a promissory note for the amount found to be due from the father, and that this note was made as security for the father's debt. The plaintiff sued on this note in D. C. 29,065 and obtained judgment, but no steps have been taken to satisfy the judgment. It is argued that on this state of facts the plaintiff

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