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Present : Middleton J. and Grenier J.toil.
PBONCHIHAMY v. DON DAVIT.
280—D. C. Tangalla. 1,074.
Action by wife to have deed of conveyance executed by her in favour of
husband set asideon theground of fraud—Nofraud proved—*
Resulting trust—A trust to re-convey—Ordinance No. 7 of 1840, s. 2.
Plaintiff sued her husband, the defendant, for the cancellation ofa deed of conveyance of land executed by her in favour of thedefendant, alleging that the defendant had fraudulently inducedher to execute the deed.
Held (on the facts), that there was no evidence of fraud.
Middleton J.—AnEnglishCourtmight find,even without
fraud being proved, that a resulting trust had arisen, to which effectmight be given in spite of the Statute of Frauds; but I doubt ifunder our Statute aCeylon Court wouldbe* able togive effect to a
trust to re-convey inthe (aceof section2, unless itwas proved that
the Statute has been used for the purpose of perpetrating a fraud.
Gould v. Innasitomby 1 and Ohlmus v. Ohlmus 2 distinguished,
rp HFi facts appear from the judgment.
Bawa( for defendant, appellant.
Bartholomeusz, for the plaintiff, respondent.
Cut. adv. vuH.
* C1908) 9 N. L. R. 28ft.
1 (1904) 9 N. L. R. 177.
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October 5, 1911. Middleton J.—
P'oixhihamy This was an action by a wife against her husband to obtain the• «. Dow Damt cancei]ation of a conveyance by her to her husband in 1906 of 5/48thsof a land .and building, which • formerly belonged to the defendant’sfather, and which he had at one time partly purchased and partlyinherited from’ his parents, and having so obtained possessionconveyed to one Babun Appu for alleged safe keeping, who conveyedit to the plaintiff. I think the evidence and the inferences to bedrawn from it clearly establish that the property was transferredwithout consideration by the defendant to Babun Appu, by BabunAppu to plaintiff, and by plaintiff again to the defendant.
The ground on which the cancellation is sought now, in confor-mity with a direction of the Supreme Court for a new trial, is thatthe plaintiff was fraudulently induced by her husband to execute thedeed in question. The learned District Judge has held that there issufficient evidence to show that defendant fraudulently induced theplaintiff to sign the deed, and gave judgment for the plaintiff.
The defendant has appealed, and for him it is contended that theevidence is not sufficient, and Nedby v. Nedby' was referred to. Forthe plaintiff it was argued that the case was exactly on all fours withthe facts In re Duke of Marlborough, Davis v. Whitehead,2 and it wassought to apply the doctrine of a resulting trust to re-convey to theplaintiff, on the principle that- the Statute of Frauds was not to beused to, cover what would amount to a fraud, and the cases of Qouldv. Innasitamby3 and Ohlmus v. Ohlmus4 were cited.
Under section 2 of Ordinance No. 7 of 1840 no promise for effecting
any transfer of immovable property other than a lease at
will or for any period not exceeding one month shall be of force oravail, unless the same shall be in writing and sigued by the partymaking the same, or his agent, and notarially witnessed. Thepromise here to re-convey, if there was one, was therefore clearlyvoid in law, and the plaintiff can only succeed by showing that therewas such- fraud in the transaction that she is entitled to give parolevidence to prove the promise, and establish that an implied trusthad arisen in her favour to have the property re-conveyed to her.But the evidence to my mind shows clearly that the plaintiff wasinduced to sign the deed, not because of any promise to re-convey,but because she thought at the time it would enable her husbandto borrow money for the purposes of future business on the securityof the conveyance in his name, and that at the most, as her son says,the defendant—his father—said he did not mean to mortgage orsell, but only to show he was worth something, and would transferthe land whenever she wanted.. The defendant might very wellhave said this perfectly bona fide, at a time when the parties were ongood terms, with the full intention of keeping his word, but in mv
‘ 1 (1852) De Gex and Smote 371.» (1904) 9 N. L. R. 117.
a (1894) 2 Chancery 138.* (1906) 9 N. L. R. 183.
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opinion this of itself would not be evidence of fraud on his part, norcould it be said that his saying so was. a fraudulent inducement to theplaintiff to transfer. The inducement was, in fact, the prospect thathe might be able to obtain money for business purposes to enable theparties to live.
In my opinion, therefore, this case is to be distinguished fromIn re Duke of Marlborough, on the ground that in that case it wasclear that the house in question had been the Duchess’s separateproperty, but in the present case the evidence all points to theconclusion that the property was in reality the defendant’s, but hadbeen transferred into the plaintiff’s name for an ulterior purpose,although she might have come to regard, it as her own property, as infact it legally became when conveyed to her by Babun Appu. Even,however, if it became the plaintiff’s property in law by this con-veyance, and she looked upon it as such, there is not here such aplain, clear, and deliberate fraud upon her, to use the words of LordJustice James in Haigh v. Kaye,1 as to induce this Court to say thata resulting trust had arisen in her favour to compel the defendantto re-convey. The Statute of Frauds has been used here by thedefendant to keep property conveyed to him by the plaintiff it istrue, but not obtained through fraud. It must be remembered thatthe English Statute of Frauds contains a section (section S) whichexempts from the necessity of proof by writing, imposed by section 7on trusts created by parties, all trusts which arise or result by theimplication or construction of law. An English Court might find,even without fraud being proved, that a resulting trust had arisen,to which effect might be given in spite of the Statute of Frauds;but I doubt if under our Statute a Ceylon Court would be able togive effect to a trust to re-convey in the face of section 2, unless itwas proved that the Statute had been used for the purpose ofperpetrating a fraud. In the Duke of Marlborough’s case the housein question was in fact the Duchess’s, and was conveyed to him forthe specific purpose of enabling the Duke to raise money on it, andwith a -distinct understanding and promise that when this objecthad been attained and the debt satisfied the properly should bere-conveved by the Duke.
In Gould v. Innasitamby the defendant took the plaintiff’s moneyand-bought a property, taking the conveyance in his own name, andin 0hlmu8 v. Ohlmus the property had been bought with moneybelonging to the plaintiff’s testator in the name of the defendant,his mother, it being proved in both cases that there was a promisethe property should be held for and re-conveyed to the rightfulowner. In both these cases thq use of the Statute wras made tocover plain, clear, and deliberate frauds by the defendants.
In the present case it is to my mind clear that no such element hasbeen proved, so as to induce us to hold that a resulting trust can be
1 7 L. 'R. Chan App. 474.
PrdncKihamyv. Don Davit
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1911.shown to have arisen. This Court in 246—District Court Jaffna,
Middleton7.409. onSeptember 11, 1911,*in followingAmeTamUra v.
«T.Rajapakse,1had occasion to advertto the dangerof extending the
-Pranohihamydoctrine ofimplied and resultingtrusts in thiscountry further
», Don Davit than it is possible to avoid.
* D. C. Jaffna, 7,409.
Bau/a (with him Talaivasingham), for appellant.
Tambyah, tor respondent.
September 11, 1911. IjASCELLBS C.J.—
The plaintiff in this action alleges that the defendant in July, 1907, boughtfrom the Crown for himself and in trust for the plaintiff and others a portionof land; that the purchase money wae contributed by plaintiff, the defendant,and the other purchasers in proportion to the shares in which it was agreedthat the land should be divided amongst them;, that the plaintiff' contributedBs. 32.50 for the purchase of one-sixth of the land; that after purchase by thedefendant the land was divided amongst the contributors, and the plaintiff wasgiven a lot of 28 lachams and 12 kulies within definite boundaries; that, theplaintiff has been in possession of and has cleared this divided lot, but thatthe defendant, although he has executed transfers to the other contributors,has refused to make a transfer to the plaintiff. The prayer is for a declarationthat the lot in question is property held by the defendant'in trust for theplaintiff, and that the defendant may' be ordered to execute' a conveyance infavour of the plaintiff. – In the alternative Bs. 500 is claimed as the reasonablevalue of the land.
The defence is a complete denial of the averments in the plaint.. Thedefendant says that he bought the land on his' own account; that he enteredinto, no agreement with the plaintiff; and that the plaintiff did not pay him.Bs.- 32.50 for a one-sixth share of "the land. It is admitted that the allegedagreement would be obnoxious to Ordinance No. 7 of 1840, and the substantialquestion is whether the defendant bought the land in such circumstances aswould constitute him a trustee for the plaintiff as regards the share claimed.
It is well settled that Courts in Ceylon will enforce the English rule of equity,that where property has been purchased by one person with money advancedfor the purpose by another a trust results in favour of the latter. IbrahimSaibo t>. Oriental Bank Corporation (3 N. L. R. 148), Could v. Inasitombp(9 N. L. R. 177), Ohlmus v. Ohlmus (9 N. L. R. 183).
But it is essential, if this rule is not to become a means of evading thesalutary provisions of the Ordinance No. 7 of 1840, that resulting trusts shouldnot be admitted, unless the advance of the purchase money is proved byclear and unequivocal evidence.
The English Courts of Equity in such cases have always insisted on very clearproof of the advance of the purchase money. Gascoigne e. Thwing and At(1 Veru 366), Willis v. Willis (2 Atkyns 71), may be referred to as illustrationsof this principle.
Applying this principle, it is obvious that the plaintiff’s case breaks downin limine for want of that clear and unequivocal proof which the law requires.
' Assuming the existence of a combination to buy the land in question, what isthe evidence that the plaintiff advanced Be. 32.50 for a share of the property t
The plaintiff himself stated ; “ We" (meaning the members of the combina-tion) all paid money; I paid Bs. 32.50. The others paid according to theirrespective shares.” This statement is denied by the defendant, and is notcorroborated by any written receipt or deed. Except Vinasitamby, none ef
> (1911) U N. L. R. 110.
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In my opinion, therefore, the appeal must be allowed, and the *****judgment of the District Court be set aside with costs of the appeal. MmsiiExoirEach party should, I think, bear his and her own costs in the J*
w. Don Davit
I agree that no fraud has been proved by the plaintiff wherebythe deed in question was rendered void. The issue on whieh theparties went to trial was whether the plaintiff was fraudulentlyinduced by the defendant to execute the deed. I think the plaintiffmeant to impeach the deed as having been obtained from her byfalse representations on the part of the defendant; that he wantedit for a particular purpose, when he really intended to deal wfth theproperty as his own. once the title was legally vested in him. Theplaintiff has entirely failed to prove any fraudulent intention on thepart of the defendant at the time of the execution of the deed orsubsequently. The plaint contains no averment of any promise bythe defendant to re-convey. All the plaintiff asks is that the deedbe declared void, apparently on the ground of gross ingratitude .onthe part of the c.efendant in having taken a mistress *to himself, andin •“ misusing his power by the said deed, as is likely to reduce theplaintiff to poverty.” Beyond making the vague assertion that thedefendant w fraudulently induced the plaintiff to execute a deed in-his favour," the plaint contains no particulars of the fraud chargedagainst the defendant. The evidence of the plaintiff falls very farshort of proving any fraud. On her own showing the defendant-told her that he wanted the deed for security for his business, and.that it was this representation that made her sign the deed. Therepresentation was apparently a true one, but- it must have been*understood by the plaintiff in a wider sense than she now desires toadmit. There is evidence to show that the plaintiff is more intelli-gent than the ordinary villager, and she must have known that herhusband would adopt the usual means of giving security by mort-gage or assignment. If he leased the property, she would be equallybenefited with him so long as they lived together; and if he sold the*property, the plaintiff would have no reason to charge her husband;
the other contributors have come forward to corroborate the plaintiff, and thevalue of Vinasitamby’s evidence is not enhanced by the fact that althoughhe states that he paid the defendant Bs, 81.25 for five-twelfths of the land, the*consideration in his own deed appears as Rs. 250. Taking the most favourableview cf the plaintiff's evidence, I do not think that it is possible to say more-than that the balance of probabilities is in favour of the hypothesis that he didadvance a portion of the purchase money. To apply the doctrine of resulting:trusts in a case where the advance of* the purchase money is a matter of con-jecture rather than of strict proof would be contrary to all such principle.
I would allow the appeal, and- dismiss the action with oasts here and in thife-Court below.
Middlmon J.—I entirely concur-.
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1911. with fraud, because she conveyed the property to him with her e^es■Gbehieb J. open, end with the knowledge that he, as owner, would be entitled-—-to deal with the property as he liked. The plaintiff says that the
defendant promised not to mortgage the property at any time, andsaid he would give back the land to her. But she admitted havingherself mortgaged the land three or four times previously to enablethe defendant to carry on his business. It is difficult to believe thatthe plaintiff would not have expected the defendant to do what shehad done to help him in similar circumstances. Why did she notcontinue raising money for him .by mortgage instead of transferringthe property to him? The answer obviously is that she made avoluntary conveyance to him to save herself the trouble of raisingmoney for him. There was no fraud practised on the plaintiff atall, and the District Judge was wrong in holding that there- wassufficient evidence of fraud.
I fail to see how the Duke of Marlborough’s case' applies, andhow the doctrine of a resulting trust can be extended to the facts aridcircumstances present in this case. The defendant was never inthe position of a trustee for the plaintiff at any time. The transferto him was an absolute one. He took no money—to make use ofone illustration—from the plaintiff to buy property for her, andthen had the transfer made out in his favour. He has not beenguilty of any fraud, either at the inception of the transaction or atany time subsequently. The cases of Gould v. Innasitamby2 andOhlmus v. 0hlm.u83 were decided on the broad principle, both oflaw and equity, that the Statute of Frauds cannot be made use of toperpetrate a fraud. The facts in those cases have no resemblanceto the facts here. In my humble opinion those cases were rightlydecided.
1 agree to the order proposed by my brother.
(1894) 2 Chancery 133.
2 (1904) 9 N. L. R. 177.
a (1906) 9 N. L. R. 133.
PRONCHIHAMY v. DON DAVIT