1. This is an appeal by the defendant in the suit from a decree of the Subordinate Judge of Benares, dated the 22nd of August 1895.
2. The claim was for the recovery of Rs. 6,500 from the defendant. The plaintiff puts his case as follows: He says that the defendant held a decree (No. 163 of 1892) against two persons named Sunder Das and Baij Nath Prasad; that the plaintiff, being related to Sundar Das, desired to purchase the decree in order to help him; that he entered into a contract with the defendant to purchase the decree, agreeing to pay any 'miscellaneous expenses' which the defendant had incurred in obtaining the decree in addition to the amount secured by the decree, costs, &c;, and that he sent to the defendant Rs. 6,500 as a deposit and in part payment of the consideration money. The plaint then goes on to allege that the defendant sent to the plaintiff two written drafts (one of a sale-deed and the other of an agreement); that the plaintiff refused to execute the agreement as he had not contracted to execute such a document; that he called on the defendant to send him a detail of the miscellaneous charges, but that the defendant insisted on the execution of the draft agreement, and neither completed the sale-deed nor sent the detail of miscellaneous charges,' but in breach of his contract put the decree into execution and realized the amount due on it. Finally, the plaintiff alleged that the defendant refused to return the Rs. 6,500. He accordingly instituted this suit to recover that amount with interest, costs, &c.;
3. The defendant in reply contended that he had not broken the contract, and asserted that it was the plaintiff who was in fault by not having paid up in proper time the balance of the purchase money and the miscellaneous charges, which he put at Rs. 2,000, though the defendant at the plaintiff's request had had the sale of Sundar Das property under his decree postponed. He denied that he had ever sent any draft agreement to the plaintiff or had asked him to execute such a document, but asserted that he had sent a draft sale-deed to the plaintiff in which Rs. 2,000 were entered as being payable on account of the 'miscellaneous charges.' The written statement of defence further alleged that defendant had sustained a loss of Rs. 2,000 by the non-completion of the contract, and in its last paragraph there is a plea that as the plaintiff was the person who broke the contract a suit by him was not maintainable.
4. The Subordinate Judge found on every issue in favour of the plaintiff and gave him a decree in full. The defendant appeals.
5. The only really important issue in this case is which side was guilty of the Breach of contract.
6. After a discussion of the facts of the case, the Court, differing from the Court of First Instance, found that the contract to purchase had been broken by the plaintiff. The judgment then continued:
The question now remains what decree should be passed in this appeal. If the defendant had persevered in the last plea set forth in his written statement, we should unhesitatingly have dismissed the suit. On our finding that the plaintiff was the person who broke the contract, we are of opinion that the plaintiff was not competent to sue to recover the deposit. In the case of Exparte Barrett, in re Parnell L.R. 10 Ch. App. 512, it was held that where a. contract for sale goes off by default of the purchaser the vendor is entitled to retain the deposit, Lord Justice James remarking that 'the money was paid to the vendor as a guarantee that the contract should be performed: the trustee refuses to perform the contract and then says--'Give me back the deposit;'--there is no ground for such a claim.' And in the same case Lord Justice Mhllish is reported to have said: 'It appears to me dear that, even where there is no clause in the contract as to forfeiture of the deposit, if the purchaser repudiate the contract he cannot have back the money, as the contract has gone off through his default.' That case was cited with approval in the later case of Howe v. Smith L.R. 27 Ch. D., 89, in which it was held by the Lords Justices Cotton, Bowen and Fry that a 'deposit, although to be taken as part-payment if the contract was completed, was also a guarantee for the performance of the contract, and that the plaintiff having failed to perform the contract within a reasonable time had no right to a return of the deposit.' Following the rule of law laid down in the above cited cases, we hold that the plaintiff, having broken his contract to purchase, had no right to a return of the deposit, and that the Subordinate Judge ought to have given effect to the last plea in the written statement of defence by dismissing the suit. In this appeal, however, the defendant appellant has not stood on his strict legal rights. He says he is willing to pay Rs. 4,500 to the plaintiff, and in the Court below, he called evidence, which we believe to be true, to show that he had tendered Rs. 4,500 to the plaintiff, who refused to accept it on the ground that he was entitled to the full Rs. 6,500. In this appeal the defendant appellant has contented himself with contesting the decree as to Rs. 2,000 and as to interest and costs. Had the appellant appealed against the whole decree, we most certainly should have dismissed the suit. But, as matters stand, the decree we pass is that we allow this appeal, that we strike Rs. 2,000 off the principal sum decreed, that we set aside the order of the lower Court allowing any costs or interest to the plaintiff, and, as we are of opinion that the plaintiff ought thankfully to have accepted the Rs. 4,500 tendered to him by the defendant, and that this suit was wrongfully instituted, we direct that the plaintiff respondent do pay all the defendant's appellant's costs in this Court and in the lower Court.