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ΠΑΓΚΥΠΡΙΟΣ ΔΙΚΗΓΟΡΙΚΟΣ ΣΥΛΛΟΓΟΣ
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(V8) 1 CLR 20
1908 February 28
[TYSER C.J. AND BERTRAM J.]
SOITRI SOTIRIOU,
Plaintiff,
v.
LUCA HAJI ZISSIMOU,
Defendant,
EX PARTE SOITRI SOTRIOU,
HAJI HARALAMBI ZISSIMOU,
Respondent.
ACKNOWLEDGMENT OF DEBT-DOCUMENT GIVEN TO BE ENFORCED ON CONTINGENCY-DOCUMENT GIVEN AS COLLATERAL SECURITY-MEJELLÉ, ART.1610- ESTOPPEL.
The doctrine of the conclusiveness of an acknowledgment of debt (deyn sened customary form (Mejellé, Art. 1610) considered.
It is open to a person bound by such an acknowledgment, as against the person to whom it was given, to show the conditions on which, according to the real agreement between the parties, it was to become enforceable.
He may also against other person claiming under the acknowledgement, unless precluded by estoppel, or some other equitable plea.
Where such an acknowledgment is given subject to the condition that it shall not be put in suit until a certain event has happened, or a certain condition is fulfilled, then although the document is conclusive as to the obligation of the person who gives it, it only becomes enforceable when the event happens or the condition is fulfilled.
Where such Van acknowledgment is given as collateral security for the performance of an agreement it does not become enforceable until there has been a breath of the agreement.
Where such an acknowledgment is given as collateral security for the performance of an agreement, and the agreement is afterwards rescinded by the parties, or for any other reason (without default of the party giving the acknowledgment) ceases to be operatives the acknowledgment never becomes enforceable and no action can be brought upon it.
A.as part of an arrangement for the settlement in marriage of his adopted son B., undertook on the celebration of the marriage to have a certain house registered in his name. The marriage was not to take place for three years and to secure B. against the contingency of A. dying in the interval, A. gave to B. an acknowledgment in the customary from, acknowledging the receipt of £100, and promising to repay it in three years with interest.
Afterwards B. borrowed money from C. depositing A.'s acknowledgment in C.'s hands. C. recovered judgment against B., and, the three years mentioned in A.'s acknowledgment having expired, sought to have the sum stated in A.'s acknowledgment to be due from A to B., applied in satisfaction of his judgment It was not proved that B. had made any representation to C., or that C. was in fact deceived by the form of the acknowledgment.
HELD: That the acknowledgment was not enforceable.
HELD: Further, that A. was not stopped as against C. from pleading that the acknowledgment was not enforceable.
This was an appeal from the decision of the District Court of Famagusta dismissing an application made on the part of the Plaintiff in the action for an order that the Respondent to the summons should pay to the Plaintiff, 50 much of a debt of £100 said to be due from the Respondent to the Defendant as was necessary to satisfy the Plaintiff's judgment.
The debt had been attached, or at any rate proceedings which accepted as equivalent to an attachment were taken. The present summons was taken under Sec. 77 of the Civil Procedure Amendment Law, 1885. The Respondent disputed the alleged debt to the judgment debtor, an issue was ordered between the parties and the District Court found that the Respondent was not indebted to the judgment debtor, as alleged.
The evidence of the alleged debt was an acknowledgment of debt, drawn up in the customary form, and signed by the Respondent, acknowledging the receipt of £100 in cash, and promising to repay the amount in three years with interest.
The Plaintiff's advocate, as a matter of fact did not allege that the Defendant received any cash from the Respondent, but only that the acknowledgment was given to the Defendant as remuneration for past services rendered to the Respondent.
According to the evidence given on behalf of the Respondent the facts were as follows:-
The Defendant was the adopted son of the Respondent and had for some years.assisted him by working in his garden. The Respondent was desirous of settling the young man in marriage and the acknowledgment was given as part of an arrangement for this purpose. The marriage was to take place after an interval of three years when the Respondent was to endow the couple with a house and the parents of the bride were to pay a sum of money to the Respondent. Until the marriage the young man was to continue to assist the Respondent in. his garden. As it was quite possible that the Respondent (who appears to have been advanced in years) might die before the arrangement was consummated (in which event there would be no transfer of the house) the Respondent to secure the young man against this contingency gave him the acknowledgment in question. The method of procedure was adopted on the advice of the Mukhtar of Varosia where all the parties resided.
Having obtained this acknowledgement, the Defendant then borrowed money on another acknowledgment from the Plaintiff depositing the first acknowledgment in his hands. Default was made in the payment of the acknowledgment due to the Plaintiff, who put it in suit and recovered judgment. The first acknowledgment, according to its terms, being now due, the Plaintiff sought to have it applied in satisfaction of his judgment debt. He contended that under Art 1610 of the Mejellé the Respondent was bound by the terms of the document, at any rate as against the Plaintiff, who on the strength of the document advanced his money to the Defendant.
The District Court, as already stated, dismissed the Plaintiff's application.
The Plaintiff appealed.
Paschales Constantinides and Agathangelos Papadopoulos for the Appellant.
Michaelides for the Respondent.
Judgment. CHIEF JUSTICE: Art. 1610 of the Mejellé if read in its literal sense is extremely stringent and in certain cases might work great injustice.
By that article, so read, any man who has been given an acknowledgment of debt made in the usual form, if payable to himself or to bearer, can recover on it. The obligee who admits his seal or signature cannot dispute it.
If a person is in possession of an acknowledgment made in his favour prima facie it must have been taken to have been given to him, but this is not conclusive.
If the maker of the acknowledgment had put it in his drawer and the person in whose favour it had been made had taken it without permission, this certainly could be proved, and an action on the acknowledgment would be dismissed because the acknowledgment had not been given.
Again if the acknowledgment had been given by the maker to some one to keep or to take to some one else, and the person to whom it was given kept it and sued upon it. Although the acknowledgment was payable to the bearer or to the person suing, he could not recover because it would be shewn that it had been given not with intention of conferring on him a right to sue but for another purpose.
Similarly in this case, it is proved that the acknowledgment was given to the Plaintiff upon terms which were agreed between the parties that the Plaintiff should keep the document as security for the performance of the terms of a marriage contract and that he should not sue unless there was default on the part of the maker of the document in carrying out his part of the marriage contract, or he should die before he could carry it out and it is open to the Defendant to show on what terms the document was given.
That is to say he can shew that by the agreement between the parties the document was neither given nor received with the intention that the Plaintiff should take with it the right to sue on the acknowledgment, except after certain conditions were fulfilled.
If the contentions of the Plaintiff were to be allowed it would follow that when an acknowledgment was given to secure the performance of certain work by the maker of the acknowledgment, the holder might still sue the maker of the acknowledgment even after he had completed the work which he had undertaken to do, because the maker would not be entitled to shew that the acknowledgment had been given merely as security.
In my opinion it is open to the Defendant to shew that an acknowledgment given was given upon express terms which disentitle the holder to sue. He cannot alter the written terms of the acknowledgment but he can prove what was the real contract made between the parties independently of the acknowledgment at the time the acknowledgment was given. It is by this real contract that the Defendant is bound and that is all the Plaintiff can claim.
I have read the judgment of Bertram, J., and I agree with the applications of this principle which he there makes, and with what he says on the subject of the plea of estoppel.
BERTRAM, J.: There is no question that Art. 1610 of the Mejellé, as interpreted by the decisions of this Court (Haralambo v. Haralambo (1891) 2 C.L.R., 21; Pieri v. Yanni (1893) 2 C.L.R., 153; Sotiri v. Sotiri (1893) 2 C.L.R., 159; and Ohannes v. Stepanian (1895) 3 C.L.R., 159) gives a very stringent efficacy to documents of this character. It is clear from these decisions that a person who has formally acknowledged an obligation in this form cannot be permitted afterwards to dispute it.
On the other hand the case of Sotiri v. Sotiri (ubi supra), which has carried this doctrine to its furthest length, expressly reserves for consideration the case of an acknowledgment of this character given on the condition that it should not be put in suit until after the death of the person signing it. Furthermore, words are used in the judgment in this case, which suggest that if there are circumstances which would make it inequitable that the party entitled under the bond should put it in suit against the party giving it, the Court will refuse to enforce it.
It is no doubt a most salutary doctrine that a person who has deliberately entered into a formal obligation of this character shall not afterwards be permitted to repudiate it. The doctrine is nevertheless subject at least to the three qualifications to be immediately mentioned nor is there anything in these qualifications which is in conflict either with Art. 1610 of the Mejellé or with the decisions of this Court.
Those qualifications are as follows:-
(1) Where an acknowledgment in customary form is given, subject to the condition that it shall not be put in suit until a certain event has happened, or unless a certain condition is fulfilled, then although the document is conclusive as to the obligation of the person who gives it, it only becomes enforceable when the event happens or the condition is fulfilled.
(2) Where an acknowledgment in customary form is given as collateral security for the performance of an agreement, then it cannot be put in suit unless and until default has taken place in the performance of the agreement.
(3) Where an acknowledgment in customary form is given as collateral security for the performance of an agreement, and the agreement is afterwards rescinded by the parties, or for any other reason (without default of the party giving the acknowledgment), ceases to be operative, then the acknowledgment never becomes enforceable and no action can be brought upon it.
Applying these principles to the present case, if the document was given simply to secure the Defendant against the contingency of the Respondent dying before the arrangements for the Defendant's marriage could be carried out, and was only to be enforced on that contingency, then, as the Respondent is still alive, the contingency has not yet happened, and the document cannot be put in suit.
If (as is possible) it was also contemplated that the document was to be a security for the Respondent performing his part of the contract with reference to the Defendant's marriage, then as there is no evidence that the marriage is in immediate contemplation or that he has been called upon to carry out his undertaking to furnish a house for the married couple, there has been no default, and the security is not enforceable. It is not therefore necessary to consider the question whether the obligation of the Respondent to provide the house was conditional on the Defendant working for three years in his garden. If this was the case, then the Defendant having failed to perform this condition, the Respondent is discharged from his obligation, and the security for the performance of that obligation will never be enforceable.
If (as is probable) the whole agreement with respect to the marriage has been by mutual consent put an end to, and the marriage for the purpose of which the security was given, is no longer in contemplation, then it is clear that the security is no longer binding.
Whether or not this acknowledgment will ever be enforceable by the Defendant against the Respondent, it is not necessary to decide. It is sufficient to say that the event, on which it was to be put in suit has not happened, and it is not now enforceable.
It is however alleged, by the Plaintiff that he advanced the money which was the subject of the action on the faith of the acknowledgment which had been entered into by the Respondent, and that he required his debtor, the Defendant, to deposit the document with him as security. He contends therefore that even assuming that the Respondent's version of the facts is true, and,, even assuming that, as between the parties to the document, the Court would be entitled to give effect to the substance of the transaction, yet that on an. issue joined between the.Plaintiff and the Respondent, the Respondent is estopped as against the Plaintiff from setting up the plea that his obligation to the Defendant was not that which appears on the face of the document.
With regard to this plea of estoppel it is not necessary to discuss whether such.a plea can be raised.in these proceedings,.or whether if the Plaintiff' has been deceived by the terms of the bond this would have created an estoppel. As a matter of fact I am not convinced that he was so deceived. It is highly improbable that he believed that the Respondent was indebted to the Defendant, a young man of no definite vocation, in so large a sum as £100 far cash received. Varosia is a small place. It would have been perfectly easy for him to have made enquiries from the Respondent himself- but he does not seem to have done so. He has not come forward to swear that he was deceived by the statement in the bond. The only evidence we have is that the bond was deposited with him at the time of the loan. This is quite consistent with his having been made acquainted with the actual facts of the transaction. The plea of estoppel therefore fails. I concur in the dismissal of the appeal with costs.
Appeal dismissed.