081-NLR-NLR-V-53-ARULANANTHAM-et-al.-Appellant-and-ATTORNEY-GENERAL-Respondent.pdf
864
DIAS S.P.J.—Arulanantham v. The Attorney-General
1950Present: Dias S.P.J. and Gunasekara J.
ARURANANTHAM et al., Applicants, and THE ATTORNEY-GENERAE, Respondent
8. C. 84 Inty.—D. C. Jaffna, 4,842
Contract—Suretyship—Separate agreements in two documents—Joinder of parties andcauses of action—Meaning of “ cause of action ”—Civil Procedure Code,ss. 5, 14.
Where, in a contract involving suretyship, the parties executed two Separatedocuments to embody their agreements and the obligee sued the obligor and thesureties in the same action—
Held, that the plaintiffs action was not bad lor misjoinder of parties andcauses of action. The two documents were in reality one document andcreated one cause of action.
A. PPEAli from a judgment of the District Court, Jafbia.
N. E. Weerasooria, K.C., with H. W. Tambiah, for the defendantappellant.
M. Tiruchelvam, Crown Counsel, for the plaintiff respondent.
,Cut adv. vult.
June 14, 1950. Dias S.P.J.—
Solomon Arulanandam, being desirous that .his son David should qualifyas an. Irrigation Officer, entered into two agreements marked “ A " and“ B ” bearing the same date, May 8, 1944, with the Director of Irrigationacting as the agent for the Government of Ceylon.
DIAS 8.P.J.—Arulananiham o. The Attorney-General865
The parties to the agreement marked “ A ” are Solomon, David and theDirector of Irrigation. David agreed that he would well and faithfullypursue his training as an “ irrigation learner ” for a period of three,years, and to qualify himself for service as an Irrigation Field Assistant.David further undertook that, after becoming qualified, he would placehis services at the disposal of the Ceylon Government for a period of notless than three years. He also promised that during that period he wouldefficiently and diligently discharge his duties. On behalf of the Govern-ment, the Director of Irrigation undertook to train David and pay hima subsistence allowance at a specified rate. It was further agreed thatthe Director of Irrigation should have power to rescind this agreementif it became necessary to do so either in consequence of the negligenceof or the failure of David to attend the classes of instruction, or to performsuch duties on irrigation works as he may be called upon to do, or inconsequence of idleness, insubordination, or misconduct. Solomon andDavid on their part solemnly undertook to enter into a bond with two suretiesin a sum of Bs. 2,000 to serve as security for the due performance andfulfilment by David of his undertaking in the agreement marked “ A ”, andalso for the payment of all loss or damage which the Government maysuffer for the loss of Government property through the negligence orcarelessness of David, or by the breach of any of the terms of the agree-ment. The agreement then contains the following clause :“ In the
event of the agreement being rescinded under this clause, and the trainingand employment of the said …. David being terminated, or inthe event of the said …. David resigning during the periodof his training, the said Solomon …. and his sureties shall beliable to pay to the Government all sums of money paid to the saidDavid during his training, and all sums of money paid, ex-pended, or incurred by the Government in respect of the training of thesaid …. David up to the date of termination thereof, and thevalue of any property lost or damaged through the neglect or carelessnessof the said …. David ”.
i –
The complementary document marked “ B ” was entered into on thesame day. The parties to', this1 agreement are Solomon, the principaldebtor, and 2nd and 3rd defendants as the sureties referred to in “ A ”.By this bond Solomon, and the 2nd and 3rd defendants, after reciting theterms and conditions of the agreement marked “ A ”, state that theobject of the bond ” B ” is “ for the purpose of securing and indemnifyingthe Government of Ceylon against all loss and damage which it might or,may in any way suffer by reason of the said agreement marked "A” beingrescinded,, or by reason of the loss or damage to property through theneglect or carelessness of the said …. David, or by reason of thesaid …. David resigning during the period of his training, orquitting without permission the service of the said Government in lessthan three years after he has been appointed a field assistant by resignationor otherwise, and for the purpose also of securing the refunding of the totalcost incurred by the said Director ..-. on behalf of the said
Government in respect of the training of the said …. David at thesaid classes and works, and in consideration of the payment and trainingso as aforesaid to be made and given to the said … David at the
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DIAS S.P.J.—-Arulanantham t>. The A Homey-General
said classes and works, and as one of the conditions of the admission ofthe said …. David to the said classes ”. The three defendantsthen solemnly state “ that the said Solomon …. and the said(2nd and 3rd defendants) …. as his sureties shallexecute the above written bond subject to the conditions hereinaftercontained ; and whereas the said …. (2nd and 3rd defendants)have agreed to become sureties for the performance of thesaid covenants and agreements ; Now the . condition of the aforewrittenbond or obligation is, &c. ”. Solomon makes himself liable to pay thefull claim of the Government, and the sureties jointly and severally bindthemselves to pay the Government a sum of Rs. 2,000. It is clear fromthe language used in the document “ A ” that the parties envisaged theexecution of a bond with Solomon as principal debtor and two suretieswho were to be bound up to a sum of Rs. 2,000 for the faithful performanceby Solomon of the covenants in the agreement “ A ". It is equally clearthat the 2nd and 3rd defendants when they entered into the bond “ B ”were fully aware of the terms and conditions of the agreement “ A ”, anddeliberately entered into the bond ” B ” in order to implement theagreement, marked ” A ”. In my opinion, although the parties utilisedtwo documents to embody their agreements, the two documents reallyform one composite agreement. One without the other is incomplete.
It is' alleged that David, having been guilty of idleness, insubordinationand misconduct, the Director of Irrigation rescinded the agreement “ A ”on March 18, 1947. . It is stated that a sum of Rs. 4,086.97 had beenexpended by the Government on account of the boy. The Governmenttherefore sued the three defendants claiming (a) the sum of Rs. 2,000against all three defendants jointly and severally, and the sum ofRs. 2,086.97 against the 1st defendant alone.
At the trial, by agreement Issues 6 and 7 were taken up for decision first.They read as follows: —
Is the plaintiff’s action bad for misjoinder of parties and causes of
action ?
• If so, is the plaintiff entitled to maintain this action ?
The District Judge held against the defendants in regard to both issues,and the question before us is whether he is right in so doing ?
The crucial question is whether the two documents ” A ” and ‘‘ Bcreate one “ cause of action ” or more than one ? Section 14 of the CivilProcedure Code provides:
” All persons may be joined as defendants against whom the right toany relief is alleged to exist, whether jointly, severally, or in the alter-native, in respect of the same cause of action ".
Section 5 of the Civil Procedure Code thus defines the expression “ Causeof action”:
“ ‘ Cause of action ’ is the wrong for the prevention or redress ofwhich an action may be brought, and includes the denial of a right, therefusal to fulfil an obligation., the neglect to perform a. duty and theinfliction of an affirmative injury ”
DIAS S.P.J.—Arulananlham v. The Attorney-General
887
The question then is whether the refusal or failure Of the three defendantsc to fulfil their undertakings in the agreements marked “ A ” and " Bamount to a refusal to fulfill one obligation or two I Is it one “ wrong ” ortwo “ wrongs ”.? If the former, Issues 6 and 7 must be answered infavour of the_£jaiernment. If the latter, the joinder cannot be justifiedHinder section 1* of the Civil Procedure Code.
The case of Aitlcen Spence & Co. v. The Ceylon Wharfage Co.1 is anauthority in point, and has been cited with approval in at least two latercases. Although the question turned on the meaning of the words “ theinfliction of an affirmative injury ”, the ratio decidendi is applicable to thepresent case. In that action, the plaintiff agreed with the Bibby Line ofsteamships (2nd defendant) to transport from -Britain and to deliverto the plaintiff at Colombo 790 bundles of hoop iron bearing a certainmark. The Wharfage Company (1st defendant), as agent of the plain-tiff, took delivery in the Colombo harbour of some hoop iron, but it waseventually discovered, that 107 bundles were short. The plaintiff beingdoubtful as to whether both defendants, or only one of them, and in the latterevent, which of the two defendants was liable, sued them jointly in one actionand asked the Court to determine which of them was liable, and to givejudgment accordingly. A plea of misjoinder having been raised, theDistrict Judge upheld it. Moncreiff J. having pointed out that the•expression ” cause of action ” had to be interpreted according to themeaning given to it by the Civil Procedure Code said:—“ Then thequestion arises—the 107 bundles having disappeared when they were mthe custody of either the Steamship Company or the Wharfage Company.—does this joint and alternative suit rest in each case upon the same‘ infliction of an affirmative injury? ’ The ‘ affirmative injury ’ is thesame in each case—non-delivery o.f 107 bundles of hoop iron marked* A S & Co.’. Is the ‘ infliction then, the same ? Granted that theBibby Steamship Company from neglect, mistake, or wilful defaultmade a short delivery, surely the ‘ infliction ’ of the injury (non-delivery))is in each case the same? That, at least, is my opinion. The ‘ inflictionwas the short delivery made to the plaintiffs, and I think it is the same‘ infliction ’, whether it is caused by the Steamship Company deliveringover the side of their vessel, or by the Wharfage Company which dis-tributes the wrong goods to its customers ”. Browne J. in a separatejudgment agreed. In the Divisional Bench case of London c£ LancashireFire Insurance Co. v. P. & O. Company 2 Pereira J. said: ” As regards .the first (question raised) the position taken up by the plaintiff is this: —
’ Our cause of action is the ‘ infliction of an affirmative injury ’ on us byeither of the defendant % companies by reason of its negligence. Wecannot say which company inflicted the injury. It • is for the Court todetermine that matter. We claim in the alternative ’. Clearly sucha claim can be made under section 14 of the Civil Procedure Code ”.Anyway, it is not necessary to labour the point, because the questioninvolved has already been authoritatively decided by this Court in the.ease of Aitken Spence & Co. v. The Ceylon Wharfage Company *. InFernando v. Gomis 3 Lyall Grant and Jayawardene JJ. held:“ The
1 (1900) 4 N. L. R. 263.* (1914) 18 N. L. R. IS, at p. 21.
» (1926) 28 N. L. R. at p. 277.
29-N. L. R. Vol.-Liii
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DIAS 8.P.J.—Arulanantham t>. The Attorney-General
injury ’ complained of was the result of the combined action of all thedefendants. It seems to me clear that such a state of affairs implies the' joint infliction of an affirmative injury and, accordingly, one ' causeof action *Whatever the motives may have been the
‘ injury ’ inflicted is one and the same. It is not the case of separate andunconnected acts, each of which gives rise to a claim in tort; but it is thecase of one act done to the prejudice of the plaintiff by the defendants incombination. This is the principle underlying the decision in the case ofAitken Spence & Co. v. The Ceylon-Wharfage Company 1 ”. Finally, thereis the case of Croos v. Goonewardene Hamine 2, the facts of which areinstructive as they deal with the “ refusal to fulfil an obligation C lentmoney to G- and secured its repayment by a mortgage bond. G repaidpart of that loan. C then lent G further sums of money, and by an oralunderstanding the two parties agreed that the mortgage bond was alsoto secure these further advances by C. G having defaulted, C filed actionon the bond. On being advised that he could not maintain the action onthe bondt C moved to withdraw the action. G objected to this. Onthe trial day C was absent, and his action on the bond was dismissed. Gthereafter instituted another action against G alleging that he had lentmoney to G on the oral agreement. It was held that though the actionin the first action was on the mortgage bond, and in the second it was forthe alleged breach of an oral agreement, yet, both actions referred to thefailure to pay one and the same debt, and that therefore the dismissal ofthe first section was a bar to the second. Wendt J. said: “ I think thatthe word * obligation in this definition is to be understood not in thenarrower sense in which a parol promise to pay a promissory note and amortgage, although given for the same debt may be described as threedifferent 1 obligations but in the more generally understood sense of aliability to pay that sum of money. Hading .the definition in this case,the cause of action was the same in both cases, namely, the failure to payone and the same debt Croos v. Goonewardene Hamine 2 was decidedin the year 1902. It has not been dissented from in later cases. Althoughthe cases of Aitken Spence & Co. v. The Wharfage Co.1, which was decidedin the year 1900, was not cited in Croos v. Goonewardene Hamine 2, thelater cases which I have cited show that the principle underlying thosecases are part of our law of civil procedure. Construing the word“ obligation ” as used in the definition of “ cause of action ” in section5 of the Civil Procedure Code in the way Wendt J. did in Croos v. Goone-wardene Hamine 2, I cannot hold that the agreement “ A ” and the bondmarked “ B ” create two different “ obligations ”. I would go furtherand hold that the two documents are in reality but one document. Onthe breach of the conditions of that agreement?1 there is but one obligationwhich arises, namely, the liability of the three defendants to indemnifythe Government by the payment of the damages which accrued, i.e., topay one and the same debt. I do not think the fact that while the 1stdefendant is liable for all the damages, the 2nd and 3rd defendantsare only liable to make-good Its. 2,000 of those damages makes anydifference. Such questions, should they arise, will only assume practicalform if the plaintiff wins the case and levies execution of the decree. The
(1900) 4 N. L. B. 263.
(1902) 5 if. L. B. 259.
DIAS S.P.J.—Thangavadivel o. Inthiravathy
369
three defendants would be jointly and severally liable to pay a sum ofBs. 2,000, while the 1st defendant alone will be. liable to pay thebalance. I hold that there is but one obligation in this case. Further-more, on grounds of convenience and for the avoidance of a multiplicityof suits, it is expedient that these questions should be decided in oneaction and not in two. The law on the facts of the case allows this to bedone.
It is therefore, unnecessary to consider the further submission madeon behalf of the appellants that, assuming that the documents " A " and** B ” create two distinct causes of action, their joinder would bejustified under section 34 of the Civil Procedure Code.
The order of the District Judge is affirmed with costs. The case willnow go back for the trial of the remaining issues.
Guvasekara J.—I agree.
Appeal di8mi88ed.