Lord Atkinson
The original defendant, Henry Amarasuriya, died since the commencement of this action and his widow and executrix has been made a defendant in the suit. She is the sole respondent. The female plaintiff and the original defendant were sister and brother, children of T.D.S. Amarasuriya deceased, who died in the year 1907 possessed of some considerable property which he left by will to his widow. The widow subsequently made over this property to the deceased defendant without making any substantial provision for the female plaintiff and her family.
The action was brought to recover a sum of Rs. 5,500, the unpaid balance of a sum of Rs. 30,000 alleged to have been on or about July 31, 1912, promised and agreed by the deceased defendant to be paid by him to the female plaintiff on 31st March 1913.
The parties had disagreed as to the issues upon which they should go to trial, and thereupon the two issues following were (amongst others) framed by the District Judge :-
"1. Did the defendant on or about July 31, 1912, promise and agree to pay first plaintiff a sum of Rs. 150,000 in five annual instalments of Rs. 30,000, each payable on March 31 in each year, the first payment to be made on March 31, 1913, and were the promise and agreement made for the reasons and considerations stated in the 5th and 6th paragraphs of the plaint ? 2. Were the payments made by the defendant in fulfilment of the said agreement or out of generosity to the plaintiff and her children?"
The first issue was treated by the learned District Judge who tried the case as composed of two parts, involving two distinct but inseparable issues - the first part putting in issue the making of the promise mentioned, which the defendant stoutly denied; and the second part, designed apparently to raise two questions : first, whether the consideration for the deceased defendant''s promise alleged in the 5th and 6th paragraphs of the plaint had in fact moved to and been received by him; and, second, whether, even if it had so moved and been received by him, it amounted to good consideration for his promise according to English law or a Justa causa debendi according to Roman Dutch law. The consideration, as stated, in the above-mentioned paragraphs of the plaint, was in effect this, that the deceased defendant held certain property received by him from his father through his mother in trust for himself and the female plaintiff in equal shares; that she, the female plaintiff, had threatened to institute against him a suit to compel him, in performance of that trust, to assign to her an undivided half-share of this property; that after much negotiation an amicable settlement was, on or about 31st July, 1912, arrived at on the terms following : first, that the female plaintiff should refrain from instituting the contemplated action, and should not assert title to any share of the aforesaid properties; and, second, that the deceased defendant should in consideration thereof pay to her a sum of Rs. 150,000 in five yearly instalments of Rs. 30,000 each on March 31 in each and every year. The female plaintiff may in those two paragraphs have phrased her claim too strongly in point of law, but it is not found proved, or even alleged in the pleadings, that she had not made it honestly, in perfect good faith and in the bona fide belief in its justice and legality and, if pressed to a conclusion, its ultimate success.
Both Courts below have found that the deceased, despite his sworn evidence to the contrary, did make the promise in the first part of the abovementioned issue set forth, and not only this, but that he had paid to the female plaintiff in pursuance of it a sum of Rs. 24,500. But when the District Judge came to deal with the second part of the issue, namely, "the reasons and considerations" for which this promise was in the 5th and 6th paragraphs of the plaint alleged to have been made, he in effect started to try upon its merits the suit threatened by the female plaintiff against her brother to compel him to perform the trust by which she alleged he was bound. He found that the alleged trust was not proved, but that it was established that the deceased defendant felt himself under a moral obligation to perform the sacred duty imposed upon him by his father''s verbal enjoinder, "which was not legally compellable" to provide for this sister, the female plaintiff, and her family; "that he had knowledge that litigation would result," which in their Lordships'' view must mean litigation at the suit of his sister, directed to enforce this obligation, misnamed by her a trust, and that it "was in that state of mind he promised and agreed to pay her Rs. 150,000 in five years and be quit of the duty." Upon the second issue he found that the payment of Rs. 24,500 was made "in pursuit of the agreement arrived at, that it was not made for the reasons and considerations stated in the 5th and 6th paragraphs, but something different, namely, the responsibility and duty of providing for his sister and her family." This he describes as something more than generosity, since it was made under a moral obligation and in pursuit of a promise. He then sums up the grounds of his decision in the words following :-
"To sum up, the position is this. The plaintiffs have proved a promise and an acceptance. They have failed to discharge the burden of proving the ''trust'' and ''agreement'' set out in the paragraphs 2, 3 and 4 of the plaint. Their justa causa fails; and if the two parts of the first issue must stand or fall together their whole case falls to the ground. I do find that the inducement for the promise was quite of another kind, viz., the consciousness that the defendant had received the larger share of the inheritance of the father and that he was in duty bound and charged with the sacred trust of providing for his sister and her family. He had taken all the estate, except the amount which had gone to the plaintiffs - whether Rs. 60,000 or Rs. 100,000. The plaintiffs have not been able to deny that the defendant had Rs. 240,000 to pay as his father''s debts, however incurred; but they aver that the father was worth Rs. 600,000 or Rs. 700,000. I came to the conclusion that the ''moral obligation'' created the ''sacred trust'' reposed in him to support the family of his sister does not constitute an adequate justa causa debendi for the part to pay Rs. 150,000. The Justa causa pleaded by the plaintiffs fails. There is no alternative but to dismiss the plaintiffs'' action with costs."
It is plain from these passages that the decision of the learned District Judge was based upon the view that the compromise could not be supported, because the alleged trust which the female plaintiff threatened to enforce by action was not a valid trust enforceable at law, nor a justa causa debendi. He thus permitted himself to be led astray by the form of the pleading and the issue from determining whether the alleged compromise which it was sought by the suit before him to enforce was valid into that of determining whether the threatened suit alleged to have been compromised could have succeeded if prosecuted to its end - a wholly different and irrelevant question. The legal validity or invalidity of the claim the female plaintiff threatened to enforce by action is entirely beside the point if she, however mistakenly bona fide, believed in its validity. Blackburn, J., in Callisher v. Bischoffsheim 1870 L. R. 5 Q. B. 449. Pointed out that in Cook v. Wright 1861 1 B. and S. 559, 570. It was decided that even if the defendant actually knew that the plaintiff''s claim, which was compromised, was invalid, yet the compromise of it was enforceable; and it was in the former case decided that the compromise of a disputed claim made bona fide is a good consideration for a promise, even though it ultimately appears the claim was wholly unfounded. In the case of Miles v. New Zealand Alford Estate Co. 32 Ch. D. 266, 291. Bowen, L.J., as he then was, said.
It is a mistake to suppose it is not an advantage, which a suitor is capable of appreciating, to be able to litigate his claim, even if he turns out to be in the wrong. It seems to me it is equally a mistake to suppose that it is not sometimes a disadvantage to a man to have to defend an action even if in the end he succeeds in his defence; and I think therefore that the reality of the claim which is given up must be measured, not by the state of the law as it is ultimately discovered to be, but by the state of the knowledge of the person who at the time has to judge and make the concession. Otherwise you would have to try the whole cause to know if the man had a right to compromise it, and with regard to questions of law it is obvious you could never safely compromise a question of law at all."
In the Court of Appeal in the present case the learned Chief Justice states in the following passage the grounds of his judgment. He said:
"The defendant had benefited largely by his father''s death, and there can be no doubt that it was his father''s wish that he should provide for the first plaintiff and her large family. He was aware that the first plaintiff, under the influence to some extent of her husband, had thoughts, of involving him in legal proceedings. But the District Judge does not find, and the evidence would not in my opinion have supported him had he done so, that the fear of litigation was the motive for the agreement into which he entered to pay the first plaintiff a sum of Rs. 150,000. The District Judge expressly holds that the defendant''s action in this matter was guided by his father''s wishes and by his consciousness that he had himself been enriched out of the family property to a far greater extent than his sister. In these Circumstances the present action which is based on an allegation of a trust imposed upon the defendant by his father in the first plaintiff''s favour must fail."
Shaw, J. said:
"The learned District Judge in the course of the judgment finds that the defendant did promise to pay the second plaintiff Rs. 150,000 and that he in fact did make payments in fulfilment of the said promise. He also finds that the consideration for the payments was something more than mere generosity and was the responsibility and duty of providing for the plaintiff''s family, and that the payments were made under a moral responsibility in pursuit of the promise."
He concurred in the result with the Chief Justice.
It is plain, therefore, from those passages that the decision of the Court of Appeal, like that of the District Judge, was not based on any assumption that a dispute had not arisen between the female plaintiff and her brother touching her claim upon his property, nor that she did not threaten litigation against him to enforce it, nor that the threatened suit had not been compromised, but solely on the ground that the "trust" upon which she alleged in her pleading he held the aforesaid property was not valid in law or did not exist. She was held rightly bound by the word "trust" used in the pleading and her action defeated, not because she had no just claim to relief, but because her claim was not of the kind she had described it to be.
It may well be that according to English law, as a general rule an existing moral obligation not enforceable at law does not furnish good consideration for a subsequent express promise Eastwood v. Kenyan 1840 11 A. and E. 438, 446. Pollock on Contracts. 8th ed. p. (189); but the Roman-Dutch law, by which in their Lordships'' view this case must be governed, is wholly different. According to the latter law it would appear that a promise deliberately made to discharge a moral duty, or to do an act of generosity or benevolence, can be enforced at law This is the general rule in modern jurisdictions where Roman law has been received. In Scotland gratuitous obligations are effectual, subject to the rule that money obligations are required to be in writings : (Bell, Principles �� 63. F. P.,) the justa causa debendi, sufficient according to the latter system of law, to sustain a promise, being some thing far wider than that which the English law treats as good consideration for a promise.
In Pareira''s Laws of Ceylon, 2nd Ed. p. 568, it is stated that where there is what the English law treats as consideration for a contract there is what the Roman-Dutch law treats as a justa causa debendi for it, but that the converse is by no means true; that these latter terms have a much wider meaning than the English word "consideration" that they comprise motive (sensu lutiori) or reason for a promise, or what in English law is known as purely moral considerations; what according to the Dutch author, Vander Kessel, is a promise which is not founded on a justa causa debendi (i. e. obligandi) does not give a right of action, although otherwise an action is maintainable on a nudum pactum. He then quotes, apparently with approval, the following passage from Morice''s English and Roman-Dutch Law, 2nd Ed. p. 78 :
"Under Roman-Dutch law a consideration in the English sense of the word is not an essential of a contract. The nearest approach to anything of the nature is the cause or causa, the presence of which is essential to a contract. The causa was taken from Roman law, and is perhaps the germ of the English doctrine of consideration... The meaning appears clearly from Grotius''s expression "reasonable cause." There must be a reason for a contract, a rational motive for it, whether that motive is benevolence, friendship, or other proper feeling, or, on the other hand, of a commercial or business nature. In other words, the agreement must be a deliberate, serious act, not one that is irrational or motiveless. This point of view would appear very similar to that of English law in recognising the validity of a contract under seal without consideration. The solemn forms of the deed under seal are assumed to involve deliberation."
In Lipton v. Buchanan 8 Ceylon N. L. R. 49. The two defendants, named respectively Buchanan and Frazer, were partners in trade. They incurred a debt to the plaintiff, for which they were of course jointly and severally liable. The partnership was subsequently dissolved by a decree of the Court and a receiver appointed. Frazer paid to the plaintiff, throughout the receiver, one-half of this debt, the plaintiff, in consideration thereof undertaking not to take any steps against Frazer personally for the recovery of the balance due by the firm until he had exhausted every possible means of recovering it against the other partner, Buchanan. At the date of this payment Buchanan was possessed of ample means to pay his debts. The plaintiff delayed taking action against him for more than a year, during which time Buchanan incurred additional debts, in the payment of which his property was exhausted. Thereupon the plaintiff sued both the former partners for the unpaid balance of the partnership debt. Two points bearing upon this case were decided. First that the case did not come within Ordinance 22 of 1866, which applies the English law to partnership transactions, and that it was therefore governed by the common law of Ceylon, which was the Roman-Dutch law; and second, that the maxim of the Roman law, ex nudo pacio non oritur actio, did not obtain in the Roman-Dutch law, and that causa in the latter law denotes the ground, reason, or object of a promise; that it has a much wider meaning than the English term "consideration,'''' and comprises motive or reason for a promise, and also purely moral consideration; and it was accordingly held that there was a lawful causa for the above-mentioned agreement by the plaintiff, inasmuch as the receiver, though he had been in possession of the assets of the firm for three years, had not been able to pay the plaintiff any thing, and that Frazer then came forward and paid half the debt, presumably saving the plaintiff further delay and trouble.
It would, in their Lordships'' view, appear from these authorities that the plaintiffs in the present case could have successfully maintained an action against the deceased defendant on the promise mentioned in the first part of the above-mentioned issue even if no suit had ever been threatened and no compromise ever been made, inasmuch as the promise was made deliberately after much negotiation, in discharge of the moral obligation found to rest upon the deceased defendant to do an act of generosity and benevolence to his sister, namely, to make a provision for her and her children; but however that may be, it is perfectly clear that if the female plaintiff had threatened to institute a suit to compel her deceased brother to discharge this moral obligation and do this act of benevolence to her, and had undertaken not to proceed with that suit on the terms that he should make the above-mentioned promise, the promise could, according to the Roman-Dutch law, have been enforced whether the suit was likely to fail or not.
The judgment then discussed the evidence and held as follows :- That the female plaintiff had long asserted a claim to the land the deceased defendant had derived from his father; that there was a dispute between them as to whether this claim was good; that she threatened to institute proceedings to enforce it, and that the deceased defendant agreed to compromise with her by paying her Rs. 150,000 on the instalments described in satisfaction of this claim.
The judgment then proceeded as follows :-
The validity of the claim, or the ultimate success of a suit brought to enforce it, is entirely beside the point. On those facts the plaintiffs were, in their, Lordships'' opinion, entitled to succeed in the present action. The question is, are they to be denied justice because their pleader has-chosen to overstate his clients'' case and the Judge to frame an issue embodying that overstatement?
If at the trial, which did not take place before a jury, the learned District Judge, who had full control over the record, had amended the issue so as to suit the facts proved, he should, in their Lordships'' opinion, have given a decree in favour of the plaintiffs for the sum sued for. He did not do so. He, on the contrary, seized upon the word "trust" used in the 5th paragraph of the plaint, and having found that no trust existed, decided against the plaintiffs, although they had established before him a good and meritorious cause of action according to the system of law applicable to the case.
Their Lordships are therefore of opinion that the decision appealed from as well as that of the District Judge were on the facts proved at the trial erroneous, and should be set aside, and this appeal allowed with costs here and below, and that judgment be entered for the appellants for the sum sued for, and they will humbly advise His Majesty accordingly.
