Fernando V. Coomaraswamy

1940     Present: Soertsz and Nihill JJ. 

FERNANDO v. COOMARASWAMY.  

132-D. C. Colombo, 8,805. 

Agreement to transfer lands-Agreement embodied in terms of settlement recorded in an action-Agreement non-notarial-Validity of agreement  -Failure to carry out agreement-Action for damages-Civil Procedure Code, s. 408 (Cap. 86). 

An agreement to transfer lands in accordance with the terms of settlement filed of record in an action and accepted by Court is binding on the parties to the settlement although the agreement was not notarially executed and was not embodied in a formal decree.

 The party entitled to the transfer is not precluded from bringing a separate action for damages against the other party for failure to carry out the terms of the agreement.

 THIS was an action brought by the plaintiff to recover damages from the defendant for failure to carry out an agreement to transfer land in terms of a settlement recorded in a mortgage action brought by the defendant against the plaintiff. 

In execution of the hypothecary decree entered in the action the plaintiff's property was put up for sale but on application of the plaintiff to set aside the sale the action was settled. 

The terms of settlement were that the property should be transferred to the defendant subject to a right of retransfer in the plaintiff on pay­ment of the purchase price within a certain period. 

The plaintiff took steps in the case in which the settlement was entered and succeeded in the end in securing specific performance of the agreement to transfer. 

The present action was brought to recover damages sustained in consequence of the delay on the part of the defendant to give the transfer. 

H. V. Perera, K.C. (with him C. Thiagalingam and A. S. Ponnambalam), for the defendant, appellant.-It cannot be said that this action is based on the decree entered in a case. The motion P 28, containing the terms of the settlement, was submitted after the sale in pursuance of the hypo­thecary decree had already taken place and at the stage of the inquiry to set aside that sale. That portion, therefore, of the agreement providing for the retransfer of certain lands was foreign to the subject-matter and decree of the hypothecary action. The words of the settlement should not be paraphrased and given the effect of a decree.

Assuming that the settlement acquired the force of a decree, the effect on it of the judgment of the Supreme Court in the appeal taken earlier has to be considered. The order of the Supreme Court set aside the earlier settlement and provided for the execution of the conveyance at a later date. It gave further time to pay the money and further time to execute the reconveyance. Inasmuch as the judgment of the Supreme Court superseded the earlier decree, the earlier oblig

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