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Present: Middleton J. and Grenier J.
FERNANDO et al. v. FONSEKA at al.
368—D. V. Kalutara, 4,616.
Prescription—Trust—Ordinance No. 22 of 1871. $$. 6 and 7.
So long as a fiduciary relationship continues, a trustee cannotset a plea of prescription in bar of a claim by the cestui quc trust.
Where the relationship ceases, a bond for the performance of anyagreement of trust is prescribed in ten years under section 6 of thePrescription Ordinance.•
Assauw et al. v. Fernando 1 commented upon.
HIS is an appeal from the following judgment of the DistrictJudge of Kalutara (T. B. Russell, Esq.): —
The question I have to decide is -whether prescription has run in barof the plaintiffs’ claim. Mdre than six years have elapsed since thelast of the plaintiffs attained majority, and under ordinary circumstancesthe claim would be prescribed. Plaintiffs' proctor, however, urged thatCathonis, the second husband of Christina, was in the position of atrustee, and that as between a trustee and a cestui que trust prescription
i (1905) 1 Bol. 174.
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cannot run, unless it can be clearly shown that the relationship hascome to an end. Cathonis, in fact, only died a few months ago. Mr. deAbrew, fordefendants, however, pointedoutthat theagreementitself
sets a term to the trnst, if that is the light in which the agreement isto be regarded. This fact certainly seems to me to distinguish thepresent case from the one quoted by defendants' proctor (1 N. L. B.
The 3rd paragraph of the plaint shows that the trustee or “ curator,"as Cathonisis therecalled, was only toholdhis officeuntilthe minors
attained the age of majority.
I think, therefore, that I am justified in assuming that the relation*ship between them came to an end more than aix years ago.
I cannot accept Mr. Orr’s argument that in any case prescription doesnot begin to runtilla demandi» madeand refused.It surely begins
to run from the time when a demand might have been made, but .wasnot made.
Plaintiffs’ action is dismissed with costs.
The following is the clause of the deed of agreement (datedJuly 28, 1884) material to this report: —
The saidmovableand immovable property,all mentionedherein,all
having beenvaluedat Bs. 1,930.33 inthepresenceandwithinthe
knowledge of Mututantrige Jacovis Fernando, father of ChristinaFernando, all thesaidrights, tillthey aredivided andpartitioned, were
taken in charge of by me, Gampolage Cathonis Fonseka, of the village ofWekada aforesaid, to be taken care of and protected by me subjectingmy own property, and we, the aforesaid two persons, GampolagePhilippa Fonseka of Wekada aforesaid, my father, and MututantrigeJacovis Fernando, father of Christina Fernando, of Eehelwatta aforesaid,have subscribed as sureties, for the same. Consequently, when the saidfive children attain their majority, an exact one-half share of the movableand immovable property herein mentioned of the amounts due fromthe saidmortgage bondsof the amountsdue for theaticles mortgaged,
or if they be forfeited from them from all these things and from furnitureand other honsehold things then existing after damage and loss from useshall beapportioned anddelivered to thesaid children,andthe one-half
share of ChristinaFernando shallbe dealtaccording topleasure, and if
the said – articles or aportion ofthem were to be lo&t or disposed of
otherwise, cash should be paid according to the value of the said articleor articles; and further, we, the three persons, Cathonis Fonseka, who‘subscribed as trustee forthe said rightson behalf ofthesaid minors,
and thesureties, Pbilippn Fonseka andJacovis Fernando,have firmly
bound ourselves regarding the same.
Sampayo, K.G., for the plaintiffs, appellants.—Cathonis Fonsekawas a trustee for the plaintiffs in respect of the movable propertyin dispute in this case. In the- case of a trust, prescnption does notrun in favour of a trustee unless something is done by the trustee tochange his fiduciary position. See Antho Pvlle v. Christoff el Pulle; 1Wannigasuriya v. Balasuriya (124—D. C. Matara, .4,805); Lightwoodon Time Limit of Actions 272; Godefroi on Trusts 712, 718. Thetrustee has not changed his position. Even if he had got rid of
* (2839) 1 N. L. B. ISO.
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his character as trustee the action is not barred, as it is not tenyears since al'l the plaintiffs have attained majority. Section 6 ofthe Prescription Ordinance applies to the case of a breach of theagreement of trust. Assauw et al. v. Fernando 1 has been commentedupon in Wannigasuriya v. Balaauriya. The words " for theperformance of an agreement of trust ” in section 6 must be read inconjunction with the earlier clause, “ any bond conditioned.”The words “ agreement of trust ” in the present edition of the, Ordinances reads ” agreement or trust ” in the earlier edition.
Bawa, for the defendants, respondents.—The action is barredin six years, as the case falls under section 7 of the PrescriptionOrdinance.
Prescription does not run against a cestui que trust under theEnglish law, as it has been expressly so enacted by Statute. Asthere was no privity of contract between the plaintiffs and CathonisFonseka, this action is not maintainable.
Sampayo, K.G., in reply.
Cur. adv. unit.
January 17, 1912. Middleton J.—
The facts of this case are set out in the judgment of my brotherGrenier, with which I agree.
The deed of agreement, No. 5,028, is in my opinion clearly theconstitution of a trust undertaken by Cathonis Fonseka, guaranteedby Philippu Fonseka and Jacovis Fernando, as regards certainproperty, including that in dispute, belonging to the plaintiffs.
Upon the principle laid down in Burdick v. Garrick,2 referred toand followed by Clarence J. in Antho Pulle v. Ghristoffel Bulled solong as the fiduciary relationship continues the trustee cannot setup Ordinance No. 22 of 1871 in bar of a claim by the cestui que trust.When that relationship Ceases, the case would come under section 6of the Ordinance, and a ten-years’ limit would be given.
So far as I can see there is no evidence to show that-the fiduciaryrelationship has terminated. The fact that the trustee had notstrictly carried out his obligations under the trust deed at the timethe cestui que trusts attained their majority cannot be relied uponby him as proving a termination of his fiduciary position. Evenif so, the time limit as laid down by section 6 has not elapsed.
As regards Mr. Bawa’s argument that there was no privily ofcontract so as to enable the plaintiffs to sue and enforce the deed ofagreement, in my opinion the case comes within the exception tothe rule he relies on, as being a case in which it appears that thetrue intent and effect of the contract was to give a person, not aparty, some beneficial right as cestui que trust under it. See thecases cited in Godefroi on Trusts, 2nd ed., p. 106.
* (1905) 1 Bal. 174.2 L. R. 6 Ch. 233.
* (1889) i N. L. R. m.
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In Assauw et al. u. Fernando,l I desire to say that my judgment inits reference to the Statute Law of Limitations in Ceylon as affecting Middletontrusts was based on a copy of the Ordinances then in use andextant, in which the word " or M appears instead of “ of ” in the Fernando v.fourth line of section 6 between the words 11 agreement ” andFonseka
“ trust. ” The words " or trust M have also been omitted in thereported judgment in Balaeingham after the words " any agreement ” ■in the fourth line of the last paragraph, page 176. The word “ of *'has been substituted for the word “ or ” in the present edition ofthe Ordinances.
I agree to the order proposed by my brother.
The plaint in this case, which contains a full statement of thematerial facts relied upon by the plaintiffs, shows that one ManuelPerera was the owner of certain movable and immovable propertyenumerated in the deed of agreement No. 5,033 dated July 28,
1848. Manuel Perera died intestate about the year 1882, leavinghim surviving his widow, Christina Fernando, and five children, whoare all plaintiffs on the record. Christina Fernando contracted asecond marriage with one Cathonis Fonseka, who died on June 17,
1911, Christina having predeceased him. The defendants are theheirs and next of kin of Cathonis Fonseka, and the plaintiffs allegedthat they had adiat-ed the inheritance, and that the value of CathonisFonseka’s estate was under Es. 1,000. The plaintiffs, as thechildren of the first marriage, claimed that in the agreement ofJuly 28, 1884, Cathonis Fonseka was constituted a trustee forthem by Christina in respect of a half share of the movable andimmovable property belonging to the first community until theyhad attained their majority. The plaintiffs' cause of action wasthat, although they had attained their majority, the defendants- are in possession of the movable property, with the exception ofan almirah, which they have disposed of. The plaintiffs admittedthat they had possession of the immovable-property. The plaintiffsestimated the value of the movable property at Es. .434.65, andthey prayed for judgment for this amount. The defendants intheir answer raised some points of -law without traversing the materialfacts stated in the plaint, and at the trial the following issues wereframed: —
Is the plaintiffs claim now prescribed ?
Is the deed of agreement No. 5,028 binding on the
Does the plaint disclose a valid cause of action against the
* am) i Bat m.
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Has Cathonis Foneeka during his lifetime settled the
plaintiffs’ claim ?
Is the movable property enumerated in the deed now in
possession of the defendants, except one almirah ?
It was agreed that all the plaintiffs attained their majority oversix years ago. It was argued for the defendants in the Court below,as it was argued before us in appeal, that as more than six years hadelapsed since the plaintiffs attained their majority their remedywas barred under section 7 of Ordinance No. 22 of 1871. Thelearned District Judge adopted this view and dismissed the plaintiffs’action. The plaintiffs have appealed. I think there can be littledoubt that Cathonis Fonseka was constituted a trustee for theplaintiffs by the deed of agreement in question. The deed is inSinhalese, and Cathonis Fonseka is described therein as curator,but the word must be understood to mean the same thing as trustee.Indeed, in the Court below no question was raised as to the characterwhich Cathonis Fonseka assumed under the deed. If he weretrustee, then it is manifest that section 7 of the Ordinance cannotapply. If any section is applicable it is section 6, and as the termof limitation prescribed by it is the years, the plaintiffs have stilltheir remedy. But the case before us is covered by authority. Itwas held by a Bench of two Judges [1 N. L. B. 120) that atrustee receiving money on behalf of his cestui que trust cannot setup a plea of prescription in bar of the claim of. such cestuique trust.In the course of his judgment Burnside C.J. said, “ No propositionis better established than that prescription does not run betweentrustee and cestui que trust. ” I agree, subject to the. observationmade by Clarence J., that “ there may be cases in which the relation-ship between trustee and cestui que trust has come to. an end, andin which the two parties have come to stand at arm’s length, andmoney which ■ originally accrued under the trust remains in thehands of the whilom trustee in another character than that of trustmoney. In such a case no doubt the statutory term might begin torun from the time when the parties ceased to stand to each other inthe character of trustee and cestui que trust. ”
The District Judge was, therefore, wrong in dismissing the plain-tiffs’ action on the ground of prescription, in the absence of anythingto show that Cathonis Fonseka had ceased to stand to the plaintiffsin the character of a trustee. I cannot accede to Mr. Bawa’scontention that as there was no privity of contract between theplaintiffs and Cathonis Fonseka this action cannot be maintained.If Cathonis Fonseka was a trustee of the plaintiSs, as it was quiteclear he was, his estate, now represented by the defendants, isliable to pay the claim of the plaintiffs.
I would set aside the decree of the Court below and send the caseback for trial and decision, if necessary, on the other issues of law
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save that of prescription! and on the questions of fact raised by the4th and 5th issues. The appellants will liave their costs of thisappeal. All other costs will abide the final result.
Set aside and sent back.
FERNANDO et al. v. FONSEKA et al