Citation Codes

Equivalent Citations

citation codes

Judges

Stanley

Acts

Schedule II, Article 89 of the Limitation Act (XV of 1877);
Sections 201 and 218 of the Contract Act (IX of 1872),
Article 89 of the Limitation Act,
SECTION 201 CONTRACT ACT

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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The action was brought by Mr. Fink in his capacity as Receiver of the estate of Sewbux Sureka (deceased) against two defendants who carried on business in co-partnership as merchants at Mandalay, Rangoon and Calcutta under the name "Buldeo Dass Jowala Persaud." The plaintiff sought recovery of Rs. 1,780-4-2 for rent of a house in Mandalay and Rs. 587-8 for the price of goods sold (or, as later clarified, goods entrusted for sale) together with interest.

Neither defendant gave oral evidence. In their statements of defence they pleaded the Statute of Limitation and contended this Court had no jurisdiction; one defendant (Jowala Persaud) also alleged that he was not and never had been a partner with Buldeo Dass in any business in Calcutta.

Procedurally, the plaint was admitted and a writ was issued under Clause 12 of the Charter by the learned Judge before whom the application for admission of the plaint was made. The question of jurisdiction was raised because the statement of claim did not aver that the agreements were executed in Calcutta, although it was proved at trial that the contracts sued upon were in fact executed in Calcutta.

Legal Issues Presented

Whether this Court had jurisdiction to entertain the suit where the statement of claim did not aver that the agreements were executed in Calcutta but it was proved at trial that the contracts were executed in Calcutta, and whether proof of signing in Calcutta would amount to a variance requiring leave of the Court.
Whether the plaintiff's claims for rent and for the price of goods (or proceeds of goods entrusted for sale) were barred by the Statute of Limitation.
Whether letters produced by the plaintiff constituted acknowledgments sufficient to take the rent claim (and/or other claims) out of the Statute of Limitation.
Whether Jowala Persaud was a partner in the firm of Buldeo Dass Jowala Persaud.

Arguments of the Parties

Plaintiff (Mr. Fink, Receiver)

The plaintiff sought recovery of rent and the price/proceeds of goods entrusted to the defendants for sale and relied on documentary evidence (letters and accounts) to establish liability and to remove the rent claim from the Statute of Limitation.
The plaintiff treated the goods claim as being for goods entrusted to the defendants for sale (agency), not for goods sold by the plaintiff to the defendants, and argued this error in description was trivial and could be rectified.

Defendants

The defendants pleaded the Statute of Limitation as a defence to the claims.
They contended that the Court had no jurisdiction to entertain the suit (based on the statement of claim's lack of an averment that the agreements were executed in Calcutta).
The defendant Jowala Persaud specifically alleged in his defence that he was not and never had been a partner with Buldeo Dass in any business in Calcutta.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Prance v. Sympson (1854) 1 Kay, 678	Where there was an admission that there was an open account between parties, an undertaking to pay was to be implied.	The court referred to Prance v. Sympson as an authority that an admission of an account can give rise to an implication of a promise to pay; it formed part of the support for holding that the letters produced constituted sufficient acknowledgment to take the rent claim out of the Statute of Limitation.
Banner v. Berridge (1881) L.R. 18 Ch. D., 254 (per Mr Justice Kay)	The case commented on Prance v. Sympson and, referring to Mitchell's Claim, supported the proposition that an admission of a pending account may justify inferring a promise to pay the balance when settled.	The court relied on the reasoning in Banner v. Berridge (the quoted passage) to justify inferring a promise to pay from an unqualified admission of an outstanding account, and therefore to treat the letters as sufficient acknowledgment.
Mitchell's Claim (1871) L.R., 6 Ch., 822	Authority (as cited in Banner v. Berridge) for the proposition that an admission that an account must be taken and is pending allows inference of a promise to pay the balance when settled.	The decision was cited (via Banner v. Berridge) to reinforce the principle that an admission of a pending account can imply a promise to pay and so amount to an acknowledgment sufficient to displace the Statute of Limitation.
Babu Ram v. Ram Dayal (1890) I.L.R., 12 All., 541	Where goods are consigned to an agent for sale, the agency does not terminate upon sale; Sections 201 and 218 of the Contract Act and Article 89 of the Limitation Act imply that the Statute of Limitation does not begin to run until the agent has accounted and the agency is terminated; suit by principal is within time if brought within three years from demand during the continuance of the agency.	The court treated Babu Ram v. Ram Dayal as governing the present goods claim: the limitation period for recovery of proceeds of goods entrusted for sale does not run from the date of sale but from the time the agency is determined (or demand and accounting), and in the present case the agency had not been determined; hence the goods claim was not barred by limitation.

Court's Reasoning and Analysis

The court approached the matter in several discrete steps corresponding to the issues raised in the pleadings:

Jurisdiction. The court observed that the statement of claim did not aver that the agreements were executed in Calcutta and that nothing else in the plaint showed jurisdiction except the title indicating the defendants carried on business in Calcutta. The learned Judge who admitted the plaint had been satisfied of jurisdiction and allowed the writ under Clause 12 of the Charter. At trial it was proved that the contracts were executed in Calcutta. The court rejected the defendants' argument that proving the signing in Calcutta would be a variance of the cause of action requiring leave to amend or to proceed. The court explained that admitting evidence of the fact and, if necessary, amending the plaint to add that the contracts were entered into in Calcutta does not constitute a material variance. It was sufficient if, on hearing, the Court was satisfied that the cause of action or part of it arose in Calcutta. The authorities cited by the defendants were, in the court's view, limited to the different situation where an additional and materially different cause of action is first brought to light at trial.
Limitation — rent claim. The rent claimed related to occupation from 21 January 1894 to 30 June 1898 under an agreement of 7 December 1893 signed by Buldeo Dass. The defendants occupied the house and the plaintiff allowed credit for rates, taxes and repairs proved to have been paid by the defendants, so the sued-for sum represented the balance. The plaintiff relied on documentary acknowledgments: letters dated 5 April 1896 and 8 September 1897 (and a solicitors' letter of 17 April 1897) which referred to the account including the Mandalay rent and showed admissions of liability or willingness to pay. Relying on Prance v. Sympson and the commentary in Banner v. Berridge (which in turn cited Mitchell's Claim), the court held that such admissions regarding an open/pending account permitted an inference of a promise to pay and therefore constituted sufficient acknowledgment to take the rent claim out of the Statute of Limitation.
Limitation — goods entrusted for sale. The court held that the statement of claim inaccurately described this cause of action as for the price of goods sold by the plaintiff to the defendants; in substance the dispute concerned goods entrusted to the defendants for sale on commission (an agency). Applying the reasoning and authority in Babu Ram v. Ram Dayal, the court treated the defendants as agents bound to account for sums received on the principal's account (Sections 201 and 218 of the Contract Act were cited in Babu Ram), and Article 89 of the Limitation Act was applied to hold that the limitation period does not start upon sale of each item but when the agency is determined or an account is required during the continuance of the agency. In the present case the agency had not been determined because the defendants had not fully accounted; accordingly the action to recover the proceeds was not barred by limitation. Because of this conclusion, the court did not need to rely on the letters as written acknowledgments for the goods claim.
Partnership (status of Jowala Persaud). The court examined oral evidence (primarily the uncontradicted testimony of Heera Lall) that Jowala Persaud carried on business in Calcutta, paid money for the firm, attended to business and wrote letters in reference to the business. Jowala Persaud did not present testimony to contradict these accounts. The court also relied on letters written by Jowala Persaud himself which treated property and accounts as belonging to "you and ourselves in partnership" and otherwise referred to an account for which both defendants were liable. On this evidence the court concluded that Jowala Persaud was a partner in the firm.
Relief and incidental matters. On liability and quantum the court found the principal sums proved to be due — Rs. 1,780-4-2 for rent and Rs. 587-8-0 in respect of the goods/proceeds. The court disallowed interest because the plaintiff had not established the alleged custom to pay interest. As to rates and taxes, only Rs. 86 and some annas had been shown to have been paid by the defendants and that figure had already been credited; if further rates and taxes had been paid the defendants were permitted to set them off against rent accruing since the institution of the action. The court awarded costs on Scale No. 2.

Holding and Implications

Core Ruling: The court entered judgment for the plaintiff in the amounts proved due: Rs. 1,780-4-2 in respect of rent and Rs. 587-8-0 in respect of the goods/proceeds; interest was disallowed; costs were awarded on Scale No. 2.

Implications and direct consequences:

The court held that proving the contracts were executed in Calcutta and, if necessary, amending the plaint to state that fact does not constitute a material variance that defeats jurisdiction; accordingly the Court entertained the suit.
The rent claim was held not to be barred by limitation because the court treated the letters and correspondence as sufficient acknowledgments implying a promise to pay.
The claim for proceeds of goods entrusted for sale was held not to be barred by limitation on the basis that agency continued until accounting; the court followed Babu Ram v. Ram Dayal and held the limitation period did not run from the date of sale.
The court found, on the evidence and writings of the defendants, that Jowala Persaud was a partner in the firm and therefore jointly liable.
No interest was allowed because the alleged custom to pay interest was not established; limited payments for rates and taxes already credited were acknowledged and any additional proof of payments could be raised as set-off against subsequent rent accruals.

The opinion applies and relies upon existing authorities rather than purporting to establish a new precedent; its holdings are the application of established principles (as cited) to the facts of the case, with the direct practical effect of decreeing the sums set out above in favour of the plaintiff.

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W.R. Fink v. Buldeo Dass And Ors.

1. The action was brought in this case by Mr. Fink as Receiver of the estate of Sewbux Sureka, deceased, against the two defendants carrying on business in co-partnership as merchants at Mandalay, Rangoon and Calcutta, and at the time the writ was issued, in Rangoon and Calcutta, under the name and style of Buldeo Dass Jowala Persaud, for the recovery of a sum of Rs. 1,780-4-2 in respect of the rent of a house in Mandalay, and for recovery of a sum of Rs. 587-8, being the price of goods sold by the defendants for Sewbux Sureka and also for interest on these respective sums.

2. Neither of the defendants has appeared to give evidence, but in their statement of defence they rely upon the Statute of Limitation, and they also say that this Court has no jurisdiction to entertain the suit on the ground which I shall presently refer to. The defendant Jowala Persaud, who is a son of the defendant Buldeo Dass, also alleges in his statement of defence that he is not and never was a partner with Buldeo Dass in any business in Calcutta.

3. The first question for determination is the question of jurisdiction. In the statement of claim there is no averment that the agreements, in respect of which the action is brought, or either of them, was executed in Calcutta, and there is nothing otherwise to show jurisdiction save it be in the title of the action in which the defendants are represented as carrying on business in Calcutta.

4. The learned Judge before whom the application for admission of the plaint was made was satisfied that there was jurisdiction, and he allowed the writ to be issued under Clause 12 of the Charter. Now, it has been proved that the contracts sued upon were as a matter of fact executed in Calcutta. I am asked to hold that, allowing proof of the signing of the agreements in Calcutta is a variance of the original cause of action, and that consequently it would be necessary to have the leave of the Court before I could make such an amendment or allow the action to proceed, and therefore I am asked to hold that the Court has no jurisdiction to entertain this suit. If I did so hold, the result would be that I should have to dismiss the action, and the following day an application might be made to me for liberty to issue a writ in respect of the very same cause of action, the only difference being that in the statement of claim it would appear that the agreements were entered into in Calcutta. I am of opinion that it does not in any way cause a variance in the cause of action to admit evidence of the fact, and if necessary amend the plaint by adding a statement, that the contracts were entered into in Calcutta; and moreover I am of opinion that it is quite sufficient if, upon the hearing of the action, it is established to the satisfaction of the Court that the cause of action or part of the cause of action did arise in Calcutta. The authorities to which I have been referred do not seem to me to carry the defendant's contention far enough. They only establish that where there is an additional cause of action for the first time brought to light at the trial, the Court has no jurisdiction to entertain the suit, inasmuch as it is a materially different cause of action from that originally sued on. This applies to the case of both defendants.

5. The next defence is a defence under the Statute of Limitation, and is common to both statements of defence. I deal with it treating both defendants as being partners. The rent claimed is rent which accrued from the 21st, January 1894 to the 30th June 1898 under an agreement of the 7th December 1893. In that agreement, which is signed by the defendant Buldeo Dass, he states that Sewbux Sureka has a house in Mandalay in which he has been living, and he says as follows:

I shall vacate the same to you on or before the 15th daylight side in Pous. If I make delay (in doing so) I shall pay you rent (at) Rs. 35, in letters thirty-five, per month for the upper and lower (storey). I shall pay, if I occupy (the same), otherwise not.

6. Now it appears that he did occupy the house and is occupying it up to the present time, and the rent sought to be recovered is the rent due up to the 30th June 1898. There was an agreement that the rates and taxes and repairs were to be defrayed by the landlord, and as a matter of fact an allowance has been made by the plaintiff in respect of all rates, taxes and repairs which have been proved to have been paid by the defendants, and the sum of Rs. 1,780-4-2 sued for represents the balance.

7. The plaintiff relies upon an acknowledgment as taking the case out of the Statute of Limitation, namely, a letter of the 8th September 1897 written by Buldeo Dass Jowala Persaud, as follows: (reads letter of 8th September, ante p. 718).

8. The account referred to in this letter included the rent of the house at Mandalay.

9. In addition to this there is a letter of the 5th April 1896 from Buldeo Dass Jowala Persaud, as follows: (reads letter of 5th April 1896, ante p. 717).

10. This is a clear admission by Buldeo Dass Jowala Persaud, whoever were the members of that firm, that they would pay this rent as per account; and the account rendered by both defendants sets forth accurately the rent claimed. There is also a letter from the defendant Buldeo Dass' solicitors, dated the 17th April 1897, in which they state to the effect that the defendant Buldeo Dass does not dispute the amount of the rent due, but they say that he claims to set-off certain items as against it which would reduce the amount due: (reads letter of 17th April 1897, ante p. 717).

11. These letters constitute in my opinion a sufficient acknowledgment of the debt to take the case out of the statute.

12. Mr. Dunne referred to the old case of Prance v. Sympson (1854) 1 Kay, 678, in which it was held that where there was an admission that there was an open account between parties an undertaking to pay was to be implied. I find that the case is commented upon in a more recent ease by Mr. Justice Kay, viz., in the case of Banner v. Berridge (1881) L.R. 18 Ch. D., 254. Mr. Justice Kay refers to Prance v. Sympson (1854) 1 Kay, 678, and at page 273 he says:

"But be that as it may, Mitchell's Claim (1871) L.R., 6 Ch., 822, certainly shows in the plainest possible manner that it was Lord Justice Mellish's opinion that if there was an admission that an account must be taken, and that there was a right to have it taken, it would be consistent with principle, and with the previously decided cases, that you must infer from that a promise to pay. If I may venture to express my own opinion upon the subject, that seems to me to be quite reasonable. I suppose there is no doubt at all about the law that, if there be an unqualified admission of a debt, that acknowledgment implies a promise to pay; and surely it seems quite as reasonable that if there is an unqualified admission that there is a pending account between two parties which has to be examined, that is, pending in the sense that it is not a settled account binding upon them, but is an account which either party is at liberty to examine, surely it is reasonable to say that the admission that there was such a pending account is an admission from which you may infer a promise that when the account is settled the balance shall be paid."

It seems to me that here the principle is carried a little further than in the case of Prance v. Sympson (1854) 1 Kay, 678.

13. These letters satisfy me that there was a sufficient acknowledgment of this debt in respect of rent to take the case out of the statute.

14. Now I come to the question of the Statute of Limitation in regard to the sale of the goods. In this case the statement of claim inaccurately describes the cause of action as for the price of goods sold by the plaintiff to the defendants, but the parties understood perfectly well that it was in respect of the goods entrusted to the defendants for sale that the action was brought. The error in the claim is trivial, and may properly I think be rectified. The goods being entrusted to the defendants for sale on behalf of Sewbux Sureka they became the agents of Sewbux Sureka for the sale of the goods and liable to account as such. That being so, the contention of Mr. Chowdhry that the Statute of Limitation would run the moment any particular item of the goods was sold is unsustainable. The law is very clearly laid down in the case of Babu Ram v. Ram Dayal (1890) I.L.R., 12 All., 541, and it seems to me that case governs the present. In that case the plaintiffs were merchants trading at Agra and they consigned at different dates in 1881, 152 bags of jeera or cummin seeds to the defendants on commission sale. On the 8th December 1881, the defendants sent the plaintiffs an account of 119 out of the 152 bags. No account was ever rendered of the 33 bags which were sold in January 1882, and the plaintiffs made no inquiry and took no action regarding these bags until the 27th December 1886, when they demanded from the defendants the price realised on sale of the 33 bags, the demand being refused. The suit was instituted, and in the Munsif's Court, as also in the Court of the District Judge, who agreed with the Munsif, the action was dismissed on the ground that it was barred by the Statute of Limitation, the Court holding that on the sale of each bag of the cummin seed the statute began to run, and also on the ground that the plaintiffs were guilty of laches and delay in not prosecuting their claim until after the lapse of six years.

15. On appeal, the decision of the Lower Appellate Court was reversed by Mr. Justice Brodhurst and Mr. Justice Tyrrell, and at page 545 they say as follows: "it was argued with much ingenuity that under Section 201 of the Contract Act the agency had terminated immediately on the sale of the goods by the business of the agency being completed. But Section 218 of the same statute provides that an agent is bound to pay to his principal all sums received on his account. Clearly then the business does not terminate on receipt of the money by the agent, inasmuch as there is a subsequent obligation to account for the sums and to pay them. Moreover, there was no allegation that their business relation had terminated when the action was brought in the Court below, and there was no justification in law or in fact for holding that the agency terminated as soon as the defendants sold the property. Applying, therefore, Article 89 of the Limitation Act, the suit is not barred and the case must go back to the Court of First Instance." The headnote of the case is as follows: "Where an agent for the sale of goods receives the price thereof, the agency does not terminate, with reference to Sections 201 and 218 of the Contract Act (IX of 1872), until he has paid the price to the principal and a demand made by the principal for an account of the price is made 'during the continuance of the agency' within the meaning of Schedule II, Article 89 of the Limitation Act (XV of 1877); and a suit by the principal to recover the price is, therefore, within time if brought within three years from the date of such demand. The agency does not terminate immediately on the sale of the goods. It does not terminate at the time when the plaintiff obtained knowledge of the defendants' breach of duty."

16. That decision seems to me to govern the present case; according to it the Statute of Limitation will not begin to run until the agency is determined. As a matter of fact the agency does not appear to be determined in this case as yet, because until the defendants have fully accounted the agency is still subsisting.

17. This being so it is unnecessary for me to refer to the letters which have been relied upon by the plaintiff as in any case taking the case out of the statute as amounting to acknowledgment in writing, signed by the defendants, or their agent, of the existence of this agency debt.

18. The only other point in the case is that raised by Mr. Sinha on behalf of his client, namely, that he never was a partner in the firm of Buldeo Dass Jowala Persaud. The evidence is altogether one way. Jowala Persaud has not come forward to give evidence and to deny that he was a partner in this firm. The clearest evidence is given by Heera Lall that Jowala Persaud carried on business here in Calcutta, that he paid money for the firm, that he attended to the business and wrote letters in reference to the business, and I see no reason to doubt that evidence is truthful. I do not think he took as prominent a part in the Calcutta business as Buldeo Dass, but the evidence satisfies me that he did take a part as a partner, and held himself out to the public as being a partner with Buldeo Dass his father. But if there were any doubt as to the truth of the oral evidence which has been given, it seems to me that the letters which were written by Jowala Persaud himself would clear away such doubt. Amongst others there is a letter, exhibit IV, written by Jowala Persaud, in which towards the end he refers to certain rubies which were in the custody of the present plaintiff and he says as regards these particular rubies:

"The rubies belonging to you and ourselves in partnership must be sold either at a high or a low price."

Jowala Persaud treats himself in this letter as being a partner with his father Buldeo Dass, and refers to these rubies as being property belonging to himself and his father as partners. Again in the letter, exhibit K, which letter is signed by Buldeo Dass Jowala Persaud, and in the letter, exhibit M, which is written by Buldeo Dass Jowala Persaud, there is an acknowledgment that there is an account outstanding between the plaintiff and defendants; in the letter, exhibit O, written by Buldeo Dass Jowala Persaud the defendants refer to this account as an account for which they were both liable.

19. Upon this evidence I can only come to one conclusion, and that is that Jowala Persaud was a partner in this firm, and on all grounds, therefore, I decide in favour of the plaintiff for the amount of principal proved to be due namely, in respect of rent Us. 1,780-4-2 and in respect of the goods Rs. 587-8-0 The interest I disallow because the custom to pay interest which is alleged by the plaintiff has not been established. I may state as regards the rates and taxes which I was asked at all events to set off against this debt, that there is no evidence whatever that any rates and taxes have been paid by the defendants, except a sum of Rs. 86 and some annas which had been allowed, and is credited in the accounts of the plaintiff. If additional rates and taxes have been paid the defendants will have an opportunity of setting off the sum paid against the rent which has accrued since this action was instituted. I decree, therefore, the amounts I have mentioned with costs on scale No. 2.

W.R. Fink v. Buldeo Dass And Ors.

Structured Summary of the Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Plaintiff (Mr. Fink, Receiver)

Defendants

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

W.R. Fink v. Buldeo Dass And Ors.

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