KRISHNASWAMI AIYANGAR Vs. SUBRAMANIA GANAPATIGAL

JUDGEMENT

(1.) In this case the plaintiff and another jointly soid certaia lands to defendants 1 and 4 for Rs. 10,000 under Ex. A. The document recites the receipt of Rs. 10,000 in cash and at the end of the document the particulars for the receipt of Es. 10,000 are given as follows :-" Rs. 8,650 received in cash,Rs.,1,350 received as per two bonds executed separately in our favour by the aforesaid T.Krishnaswami Iyengar (the 1st defendant)". One bond was executed in favour of the present plaintiff and the other in favour of his co-vendor Srinivasa Varadachariar. The plaintiff now sues to recover the amount due to him on account of this sale, namely Rs. 675 with interest. He also makes other claims with which we are not concerned now. The lower courts have given him a decree for the amount due and have also given him a charge on the plaint property, treating the amount as unpaid purchase money.

(2.) It is now contended in appeal that this charge ought not to be given because the whole of the purchase money had been paid. This plea is based on two grounds (1) that the two promissory notes constituted part of the consideration to be paid for the land and were not merely collateral security for the unpaid purchase money and (2) that the vendors accepted the sole liability of the 1st defendant in respect of those two promissory notes and exonerated the other vendee the 4th defendant. The appellant has quoted a large number of English cases in support of his plea, but it must be observed that the vendor s lien for unpaid purchase money is of a somewhat different nature in English law from the statutory lien granted under Section 55(4) of the Transfer of Property Act, for in England the lien is an equitable lien and is based on the assumption that although the legal estate, passes at the time of sale, the equitable estate does not pass until the purchase money has been completely paid.

(3.) For this reason the two cases quoted, viz., Earl of Jersey v. Briton Ferry Floating Dock Company (1869) 7 Eq. 409, and Winter v. Lord Anson (1823) 57 E.R. 174, have no application here. Three other cases have been cited, viz., Dixon v. Gayfere (1857) 44 E.R. 878, Parrott v. Sweetland (1835) 40 E.R. 250, and In re Brentwood Brick and Goal Company (1877) 4 Ch. D. 562. In two of those cases, the consideration for the sale was the payment of an annuity to the vendor or his relations, and it was held that the vendor had no lien on the property in respect of the amount so secured. The third case was one where a consideration of ?6,000 was agreed to be paid out of shares which were to be subsequently allotted by the vendee Company. It was there held that the consideration had actually passed and that the balance which was due was secured by an agreement which was accepted in lieu of cash. The details of the cases are not of very much importance here except as authority for the proposition that it is open to a vendor to accept security from the vendee for part of the purchase money in lieu of the actual cash and thus to lose his lien for unpaid purchase money. But whether he actually does so or whether he accepts the agreement merely as collateral security for future payment, is a question of the intention of the parties. Similarly in other English cases where a creditor accepted the liability of one of two or more joint debtors, it was held to discharge the other debtors in respect of the original debt due. Vide Lythe v. Ault (1834) 7 Ex. 669 : 156 E.R. 1117, and Thompson v. Percival (1834) 110 E.R. 1033.