(COURT OF APPEAL)

THE SUDAN DOTJM PRODUCTION CO. v. YOUSIF EISA OSMAN

AC-RE V-777-1969

Principles

  Contract—Estoppel—Acceptance of cheque for a part of a debt stops the creditor from demanding the balance

Respondent received a cheque from applicant for the sum of £S.200.000m/ms. in full satisfaction of the execution debt of the sum of £S.250.000m/ms. Later respondent applied to the District Court for collection of the balance. District Court rejected the claim and considered the execution satisfied.
Province Judge set aside the District Court order on ground that acceptance of a part debt does not stop the creditor from demanding the balance for lack of consideration.
Held: The acceptance of a cheque for the sum of £S.200.000m/ms. for part of a debt of the sum of £S.250.000m/ms. stops the creditor from demanding the balance of the debt. This is an exception to the rule that payment of a part of a debt is not a discharge of the whole because of lack of consideration.

Judgment

Mahdi Mohamed Ahmed J. March 12, 1970:—Applicant is the judgment

-debtor in EX-I20-1968 Kassala District Court. Respondent is the creditor. The execution debt was the sum of £S.250.790m/ms.

On June 16, 1968 the court issued an order for the sale of applicant’s car. On June 30, 1968 the warrant of sale was returned by the bailiff unexecuted because respondent informed the bailiff that he received a cheque from applicant for £S.200.000m/ms. in full satisfaction of the debt. However, on November 3, 1968 respondent appeared in court and applied for collection of the balance denying any promise on his part to forgo such a balance. The court examined the bailiff on oath who confirmed his previous statement in the sale warrant that respondent told him to stay the sale and to consider the execution satisfied. Thereupon the court refused to proceed with the execution. Respondent applied to His Honour the Province Judge to revise the order of refusal. His Honour the Province Judge set aside the order on the ground that acceptance of part of the debt does not stop the creditor from demanding the balance. Hence the present application.

It has long been settled that payment of a part of a debt is not a discharge of the whole because of lack of consideration. This rule is deemed to be harsh and was severely criticized: Cheshire and Fifoot, The Law of Contract (6th ed., 1964), pp. 80—81. The courts made several attempts to minimize its rigour through exceptions. A sweeping change was brought about by the invocation of the doctrine of equitable estoppel by Lord Denning in Central London Property Trust Ltd. v. High Trees House Ltd. [1947] K.B. 130.

One of the exceptions to the above rule is that payment other than in cash will amount to satisfaction. Hence, in Sibree V. Tripp (Cheshire and Fifoot, Law of Contract (6th ed., 1964), p. 80), it was held “if for money you give a negotiable security you pay it in a different way.” The facts of the above case are on all fours with the present case. There the defendant owed the plaintiff £S. 1,000.000m/ms. and gave him promissory notes for £S.300.000m/ms. in full satisfaction.

Hence, I conclude that the cheque for £S.200.000m/ms. made by applicant and accepted by respondent amounts to a full satisfaction of the execution-debt. Therefore, the order of His Honour the Province Judge must be set aside and the order of the learned District Judge that the execution be deemed satisfied reinstated. Respondent should bear the costs of this application.

Ramadan Au Mohamed J. March 16, 1970:—I concur.