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Present: Dalton and Lvall Grant JJ.
HAMEED et al. v. ZEYNAMBU et al.
13—D. C. Galle, 22,833.
Transfer of immovable property—Reservation of the option to obtain are-transfer—Assignment of the option—Assignee's right to enforcethe option.
The first plaintiff transferred for consideration certaih immovableproperty to the first defendant subject to the exercise of an optionto obtain a re-transfer on payment of Rs. 3,000 before the expirationof fonr years. The second plaintiff obtained an assignment of theoption for consideration on a duly registered notarial instrument.The first defendant had due notice of the assignment.
Held, that the option to re-purchase was an assignable interestand that the assignee was entitled to enforce it.
^ PPEAL from a judgment of the District Judge of Galle.
Hayley (with B. F. de Silva and Ismail), for plaintiffs, appellant.
Driebergt ff.C. (with H. V. Per era), for defendants, respondent.
September 24, 1926. Dalton J.—
The facts in this case are as follows: The first plaintiff AbdulBahaman Abdul Hameed, by deed marked D1 dated July 15, 1921,sold and conveyed certain immovable property to the first defendantZeynambu Nachia, who is the wife of the second defendant AbdulMohideen, in consideration of the sum of Rs. 2,000, subject to aprovision in the following terms: —
“ If the said vendor, or his heirs, executors, or administrators shallbe desirous of obta'ning a re-transfer of the said premisesand shall before the expiration of four years from thedate hereof repay a sum of'Rs. 3,000 before a notarypublic ”—
he might obtain the preparation of a deed at his own expenseand the vendee would transfer the property back to the vendor.By deed D2 dated January 28, 1924, the first plaintiff assignedall his rights under D1 to his wife Halma Umma for the sum ofRs. 50. This deed was never registered. Thereafter, by deed PIregistered on June 2, 1925, the first plaintiff, in consideration ofthe sum of Bs. 250, assigned all his rights under D1 to the secondplaintiff Meera Lebbe Abdul Bahaman. Notice of this secondassignment was given to the first defendant by letter P2 datedJune 12, 1925. This letter also asked her to re-convey the propertyin terms of the deeds he had executed JD1). The sum of Bs. 3,000was to be paid on the signing of the re-conveyance. Firstdefendant answered by her proctor (P3) chat she was ready tore-convey the property to the first plaintiff in terms of PI and tono one else. This was accepted by plaintiffs (P4), but tinsacceptance was subsequently withdrawn, as the proctor of thetwo plaintiffs (who were not separately represented) found onexamination of the Land Register that a caveat had been lodgedin respect of this land hv a creditor of the first- plaintiff. Therecord of the lower Court gives no information as to the date ofthis caveat. He, therefore, insisted on a re-conveyance in favourof the second plaintiff, the assignee of the first plaintiff. Defendantmaintained her object’on, subject to her offer already made, andthereupon, on July 14, 1925, the two plaintiffs filed their plaintbringing Rs. 3,000 into Court and claiming a re-conveyance ofthe property to the second plaintiff. The defendants’ answerpleaded that first plaintiff had no right to assign his rights underDl, and the sole issue framed was as follows: —
Are the plaintiffs entitled to ask for a transfer in favour of thesecond plaintiff ?
It will be seen that this issue is in such broad and indefiniteterms as to give the defendant a very wide scope for defending theaction. Evidence was accordingly tendered and admitted to show
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inter alia that, apart from a denial o' any right to assign, therehad in fact been an assignment by the first plaintiff of his rightsprior to the execution of PI in favour of the second plaintiff.The learned District Judge came to the conclusion that the firstplaintiff's rights were assignable, and that defendant had no rightto refuse to accept the Rs. 3,000 from first plaintiff’s, assignee.But he comes to the conclusion that first plaintiff's ftss’gnmentto second plaintiff was probably bad. This conclusion is presumablybased on the fact of the existence of the prior assignment D2.Then the learned Judge continues: —
*' I hold that the plaintiffs are entitled to ask that the defendantre-transfer the property to the first plaintiff and that thesecond plaintiff is entitled to ask the first plaintiff tore-transfer it to him in view of his assignment. 99
This appears to be contrary to the previous conclusion, that theassignment to the second plaintiff was bad. Finally, he holdsthat the second plaintiff cannot ask the defendant to do more thanre-transfer the property to the first plaintiff, and as the plaintiffswere asking for more than that their claims should be dismissed.
The first matter raised upon the appeal is the application ofcounsel for the appellant to lead further evidence in respect of thedocument D2 which was tendered by the defendant in the Courtbelow and admitted without objection. Nothing that I have heardin the course of the argument has satisfied me that the Court shouldgrant this request. First plaintiff was a party to that document andwas quite aware of its existence although he may have been surprisedthat the defendant should produce it. Further, it was admitted,although only a copy, without objection. This application there-fore must be refused. The plaintiff, however, is successful on anotherpo:nt. In view of the fact that D2 has not been registered, underthe provisions of section 17 it is void as against the second plaintiffwho claims an adverse interest thereto on PI, on valuable consideiation. This is not questioned by counsel for respondent. Theposition he takes up is that the undertaking to convey is enforceableonly by and to the first plaintiff with whom the contract was made,and that there is no undertaking to convey to an assignee as thesecond plaintiff. I entirely agree with him that the deed D1 is acontract of sale and has all the requisites of a conveyance of landnotariallv executed in due form of law. It contains an undertakingby the vendee to re-convey on certain conditions within a limitedtime. The vendor then cedes his rights under the contract to thesecond plaintiff. There can be no objection as to the form of thecession which has all the requisites to make it effective, but hisright to cede or assign is questioned by defendant, the vendee.Stress is laid upon the clause of D1 undertaking to re-convey to thevendor or his heirs and administrators. As the word “ assigns ”
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is not included it is argued that there is a clear intention to avoidany possibility of an assignment of the rights under the deed. Butthere is no doubt that those rights pass on death and are not purelypersonal to the vendor, and as a general rule a right which passeson death is in law capable of assignment. In Eastern Rand Explor-ation Co. v. Net 1 Innes C.J. stated the common law, in thefollowing terms: “ generally speaking, the question of whether oneof two contracting parties can by cession of his interest establish acessionary in his place without the consent of the other contractingparty depends upon whether or no4 the contract is so personalin its character that it can make any reasonable or substantialdifference to the other party whether the cedent or the cessionaryis entitled to enforce it. Subject to certain exceptions foundedupon the above principle rights of action maj by our law be freely.ceded.” This case does not come within any o,f the exceptionsmentioned by Sande (Cession of Actions). The addition of theword ” assign ” was not necessary to the deed to give the power ofcession or assignment; therefore the mere omission of the wordcannot be taken under the circumstances to be evidence of anyintention that the power to cede or assign should be expresslyexcluded.
The three essentials of a valid cession of action as set out byMaasdorp (Institutes, Vol. IV., p. 174) are present here, namely, aright of action capable of being ceded, an intention to cede basedupon some legal ground, and a formal cession according to law.
For these reasons I am of opinion that the learned Judge waswrong in dismissing plaintiff’s claim. His order must therefore beset aside. The appeal is allowed. The second plaintiff is entitledto an order in terms of the prayer of the plaint together with costsof the action. On execution of the re-conveyance, the Ks. 3,000will be paid out to the defendant. Under the circumstances Iwould direct that the first plaintiff pay his own costs of trial, so faras they can be separated from those of the second plaintiff, as h_isconduct- in executing D2 was most unsatisfactory.
The second plaintiff is entitled to costs of appeal.
Lyall Grant J.—
I agree that this appeal should be allowed. The contract isclearly an assignable one and has been properly assigned. Theprevious assignment to the second plaintiff’s wife was not registeredand cannot prevail over the later registered one.
The parties are agreed that the effect of the caveat had expiredbefore the action was brought.
The defendant is therefore not entitled to refuse to execute atransfer in favour of the second plaintiff.
1 (1903) T. S. 42.
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In regard to costs, I think the defendant should pay the costs o£the second plaintiff. She has all along taken up the attitude ofrefusing to convey to him. The first plaintiff should, in my view,bear his own costs, as his conduct in making a previous assignmentwas not candid, and this conduct when it came to the defendant'snotice afforded her some justification for refusing to convey tothe second plaintiff.
HAMEED et al. v. ZEYNAMBU et al