1926 Present : Dalton and Lyall Grant J J.

PERIS v. VIEYRA

172-D. C. Negombo, 623.

Agreement to by land-Part payment of purchase price-Deposit-Forfeiture-Conditions of agreement.

Where a person paid money in part payment of the purchase price of property he had agreed to buy, and then made default in carrying out the terms of the agreement.

Held, that he was entitled to recover the money so paid.

Money paid by way of deposit is forfeited on the repudiation of the contract by the payer.

The question whether the payment is on account of the purchase price or by way of deposit depends upon the terms of the agreement.

APPEAL from a judgment of the District Judge of Negombo.

The plaintiff sued the defendant to recover a sum of Rs. 1,200 paid by him as part payment of the purchase price of a property belonging to the defendant. The defendant admitted the receipt of the money, but pleaded that the transaction fell through owing to the fault of the plaintiff, and therefore the plaintiff was not entitled to claim back the advances. The learned District Judge held that as the plaintiff notified to the defendant that he could not complete the transaction before the date agreed upon, and as the defendant had sold the property to another for Rs. 3,750, there was no default by the plaintiff. As plaintiff conceded that the defendant was entitled to retain Rs. 250 out of the advances to bring the Rs. 3,750 up to the original sum of Rs. 4,000, which was the purchase price, the District Judge accordingly entered judgment for the plaintiff for the sum of Rs. 950.

Keuneman, for defendant, appellant.

H. V. Perera, for plaintiff, respondent.

December 21, 1926. DALTON J.-

Plaintiff in this action sought to recover from the defendant the sum of Rs. 1,200 paid by him to the defendant as part payment of the purchase price of a property belonging to the defendant, the purchase price being Rs. 4,000. Defendant admitted the receipt of the money and that the transaction fell through, but he pleaded

that it fell through owing to the fault and neglect of the plaintiff, and therefore the plaintiff was not entitled to claim back any advances made on account of the transaction. The plaintiff produced a receipt (PI) for Rs. 1,000, which was in the following terms: -

December 11, 1924.

Received from J. M. T. A. Peries of Kalleliya the sum of  Rupees One thousand (Rs. 1,000) as a  part payment in advance of the consideration due from the said J. M. T. A. Peries on the intended purchase of my land at Bingiriya in the District of Kurunegala, owned and possessed by me under deed No. 10,132, attested by B. N. I. Jayasekera, Notary Public.

The entire consideration on the intended deed of transfer of Bingiriya estate being Rupees Four thousand (Rs. 4,000). The intended deed of transfer to be executed on or before the 22nd day of December, One thousand Nine hundred and  Twenty-four.

(Signed) VIEYRA.

Witnesses:

1. P. J. LOOS.

2. F. FERNANDO.

It has been called, in the course of the argument before us, the "informal agreement." It is admitted that shortly prior to December 11 defendant also received Rs. 200.

The learned District Judge held that as plaintiff notified defendant he could not complete the transaction before December 22 as set out in the receipt, and as defendant thereupon sold the property at once to another party for Rs. 3,750, there was no default by the plaintiff, the latter conceding that defendant was entitled to retain Rs. 250 of the advances to bring the Rs. 8,750 up to the original Rs. 4,000. He accordingly entered judgment "for the plaintiff for the sum of Rs. 950. From that decision defendant appeals urging the plaintiff is entitled to nothing.

There was no issue in the lower Court as to the nature of these payments made by the plaintiff, but it is now urged on appeal that they were, merely a, deposit or earnest money to bind the transaction, and as such irrecoverabl