Rodrigo Et Al., V. Ebrahim

1943 Present: Howard C.J. and Wijeyewardene J.

RODRIGO et al. Appellants, and EBRAHIM, Respondent.

182-D. C. Colombo, 9,517.

Novation-Agreement to substitute one debtor for another-Promise to pay debt of another-New consideration-Prevention of Frauds Ordinance (Cap. 57), s. 18.

Where, by agreement, one debtor is substituted for another with the consent of the creditor there is a novation of the debt and such an agreement falls outside the scope of section 18 of the Prevention of Frauds Ordinance.

Where the promise to pay the debt of another is based upon a new consideration such an undertaking is regarded as an original promise and is not within the section.

Fernando v. Abeyegoonesekera (34 N. L. R. 160) followed.

APPEAL from a judgment of the District Judge of Colombo.

H. V. Perera, K.C. (with him C. Thiagalingam and C. Ranganathan), for the defendants, appellants 2A and 2B.

N. E. Weerasooria, K.C. (with him E. G. Wickremanayake), for the plaintiff, respondent.

Cur. adv. vult.

October 5, 1943. HOWARD C.J.-

This is an appeal from a decision of the District Judge of Colombo, entering judgment for the plaintiff as claimed for the sum of Rs. 2,569.88 and costs. The plaintiff maintained that this sum became due from the defendants in the following circumstances. The plaintiff had contracted with the first defendant to supply labour for the transport of merchandise discharged from steamers calling at Colombo under the agency of Messrs. Narottam & Pereira, Ltd. On June 27, 1938, there was due under

this contract to the plaintiff a sum of Rs. 2,769.88. On August 5, 1938, the defendants entered into a deed of partnership to carry on the business of the first defendant under the firm name of Muniswamy & Company. On this deed the appellants contracted with the first defendant to pay in full all debts that had been incurred by the first defendant up to the date of the said deed. It was also alleged by the plaintiff that, immediately after the execution of the said deed, the appellants requested the plaintiff to carry on the work of loading and transporting merchandise from the said steamers and stating that they would pay the amount due from the first defendant. The plaintiff states that he accepted this undertaking to pay the said sum and continued the work of loading and transporting merchandise. It was further averred by the plaintiff that, in pursuance of this agreement a sum of Rs. 200 was paid by the appellants to the plaintiffs in part payment. In finding in favour of the plaintiff the learned Judge held-

(a) that the appellants undertook to pay the debt due by the first defendant to the plaintiff ;

(b) that the plaintiff agreed to accept from the appellants payment of the sum due to him ;

(c) that there was a novation of the debt due by the first defendant to plaintiff by reason of the plaintiff agreeing to recover the debt from the appellants ;

(d) that the first defendant is released from liability, but the debt has been taken over by the firm of Muniswamy & Co., consisting of the three defendants.

Counsel for the appellants has challenged the decision of the learned Judge on two grounds as follows: - (a) That it has not been established that the appellants undertook to pay the debt of the first defendant to the plaintiff (b) That the first defendant was not released from his obligation to pay the plaintiff and hence there was no novation of his debt. In these circumstances the undertaking by the appellants, even if given, was an agreement for charging them with the debt of the first defendant. Not being in writing, it was, by virtue of section 18 of the Prevention of Frauds Ordinance (Cap. 57) of no avail in law. I am of opinion that there is no substance in (a). It was a pure question of fact and it is impossible to say that in arriving at the, conclusion he did, the learned Judge has misdirected himself.

The main argument

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