1936 Present : Abrahams C.J. and Fernando A.J.

SATHASIVAM v. ATHARIYA

87-D. C. Colombo, 48,002.

Agreement-Settlement between debtor and creditors-Agreement by third party to pay the deficit-Decision as to amount of deficit-Binding on obligor.

O. L. M. was indebted to several creditors and a settlement was arrived at by which it was agreed that the plaintiff respondent should receive his assets and realize the proceeds for the benefit of his creditors. The first defendant gave a mortgage bond to cover any deficit between the sum realized and O. L. M's debts, the liability on the bond not to exceed Rs. 15,000. It was inter alia agreed under the terms of the bond that the statement rendered to the defendant by the plaintiff as receiver aforesaid of the amounts realized by the conversion of the assets and book debts of O. L. M. shall be final, binding, and conclusive on the defendant.

Held, that the agreement was valid.

An agreement to submit to the decision of one party to a contract any dispute arising out of that contract is an exception to the doctrine that a party ought not to be judge in his own cause.

APPEAL from a judgment of