Tikiri Menika v. Lousa Aluris.
1933Present: Dalton A.C.J. and Koch AJ.
TIKIRI MENIKA v. LOUSA ALWIS.
94—D. C. Kandy, 40,719.
Agreement to retransfer land—Right of heirs of vendor to exercise option—Absence of time limit—Validity of agreement—Prescription—Validity.Where a conveyance for the sale of land cantained an option forretransfer on the payment of a certain sum of money, the right toobtain a retransfer passes to the heirs of the vendor.
Such an agreement is not bad in law merely because it does not specifythe time within which the option is to be exercised.
^^PPEAL from a judgment of the District Judge of Kandy.
One _Loku Banda by deed dated November 19, 1930, sold andtransfeixed certain property to the defendant. The deed contained aprovision whereby defendant undertook to retransfer the lands to thevendor for the same consideration. This action was instituted by theheirs of Loku Banda on January 21, 1931, claiming to enforce specificperformance of the agreement to reconvey. The learned District Judgegave judgment for the plaintiffs.
H. V. Perera (with him D. W. Fernando), for appellant.—The agreementis for a retransfer without a time limit. Executory interests in land of thisnature are governed by the Trusts Ordinance. The doctrine of reasonabletime cannot be imported into a contract of this kind. Either the demand
» 84 N. L. R. 185.
DALTON A.CJ.—Tiktri Menika v. Lousa Alwis.31$had to be made by Loku Banda alone or it was perpetual. Documentswith an option to repurchase must be strictly construed ( (1871) 12 Equity .Coses 9). Time is of the essence of the contract. If no time limits isexpressed the Courts will infer a limitation from the document itself. Inthis case the time limit is the lifetime of Loku Banda.
[Dalton A.C.J.—Suppose the defendant had died. Could LokuBanda claim a retransfer from his heirs?]
That may be the consequence of a strict construction of the document.But the position is not exactly the same. The defendant is bound to sellif the offer is made. He cannot retract. But Loku Banda is not boundto make the offer. The obligation of the defendant therefore maydevolue on his heirs although Loku Banda’s right may be personal. Hisinterest is only an executory one. Such an agreement comes withinsection 93 of the Trusts Ordinance. If it is unlimited in time it is void.Section 116 of the Trusts Ordinance brings in the English law. Counselcited (1881) 20 Ch. 5562; (1905) 2 Ch. 257; 38 Madras 114.
.V. E. Weerasooria, for respondents.—The document affects immovableproperty. The Roman-Dutch law must be applied. Van Leeuwen’s Cevs.For. 1, 4, 20, 3 to 7. Voet 18, 3, 7, and 8 says that no time limit need beimposed. The right is a right in land and passes to the heirs unless thecontract is limited in express words to a particular party (Hameed v.Zeynambu1; 3 Searle 75; (1868) Buck. 247). Under the Roman-Dutch lawsuch a right could not even be prescribed. In this case no question ofprescription can arise. Where no time limit is expressed the right may beenforced at any time under the Roman-Dutch law or at any time beforeit is prescribed under our Prescription Ordinance. Even ordinarily inthe case of a contract where no time is mentioned the contract mustbe performed within a reasonable time. There is no distinction in thisrespect between the sale of goods and the sale of land. (Leake, 6th ed., 613.)
H. V. Perera, in reply.—A party has no right to come into Court untilthere has been a demand and a refusal. It is only then that a cause ofaction arises. Prescription begins to run only where the right of actioncommences. The solution to this problem cannot be sought in the ruleof prescription. The right to make the demand is not transmissible tothe heirs. But if the demand has been made and refused the right tosue is transmissible. All assignable rights do not necessarily pass to theheirs, e.g., a life-interest.
Cur. adv, vult.
June 29, 1933. Dalton A.C.J.—
Two questions were raised on this appeal, (1) as to whether an optionto obtain a retransfer of land on the payment of a certain sum was a rightthat passed on death to heirs, and (2) whether, if the agreement underwhich the option is granted does not specify the time within which it isto be exercised, it is bad in law and unenforceable.
One Loku Banda by deed (P 1) of November 19, 1930, sold and trans-ferred six pieces of land, described in the schedule to the agreement, toG. L. Alwis, the present defendant, for the sum of Rs. 1,000. This sumwas retained by Alwis, on the conveyance being executed, in order to paya debt due on a promissory note by Loku Banda to one Perera, and no
* 28 V. L. R. 175.
DALTON A.C.J.—Tikiri Menika v. Lousa Alto is.
money passed between transferor and transferee. The deed also con-tained a provision whereby Alwis undertook to retransfer all the landsto Loku Banda, on demand, for the same consideration. LokU Bandadied the following month, December, 1930, unmarried and intestateleaving as his heirs his brothers and sisters. By this action instituted onJanuary 21, 1931, having brought the sum of Rs. 1,000 into Court, theyare seeking to enforce specific performance of the undertaking to reconvey,which defendant refuses to do. They succeeded in their claim in thelower Court, and defendant now appeals. •
On the first point it was argued on his behalf that the deed P 1 set outall the terms of the contract between the parties, and that under it LokuBanda, alone had the right to demand a reconveyance. There is nodoubt, of course, that the parties to the deed could have so provided ifthey wished, but I am unable to agree that the words used contain anysuch restricted provision. It is conceded that had Alwis died and notLoku Banda, the latter would have been able to obtain a reconveyancefrom the heirs of the former. Having regard to the words used in thedeed, I can see no such limitation there as counsel contends. .
In that event, is this a right which passes to Loku Banda’s heirs? Canthey demand a retransfer as claimed in this case on payment of the summentioned in the agreement?
We have been referred to the provisions of Voet XVIII. tit. 3, ss. 7, 8,where the subject is discussed at some length under the title of jusredimendi or pactum de retrovendendo. There the remedy of the vendor onsuch an agreement is dealt with, and it is stated that his right passes tohis heirs and is also assignable. Van Leeuwen (Censura Forensis, Pt. I.,bk. IV., ch. 20) is to the same effect. The law as laid' down inthese authorities has been applied in South Africa. One of the cases citedto us (Joseph Executor v. Peacock ’) raises just the same question as israised in the case before us. Peacock who was the owner of a farm,under a written agreement, in 1843 sold half the farm to Joseph. • Therewas a stipulation that if either wished to dispose of his half share, theparty wishing at any time to sell shall be obliged to offer his share to theother for the amount of the original cost of the half, together with suchamount as might be agreed upon for improvements. Joseph died in 1866being still the owner of his half share. His executor, son of deceased,thereafter sold the share to a third party, in whose name it was thenregistered, without having offered it to Peacock. The latter thereuponinstituted this action praying for transfer of the half share in' question,tendering to pay £2,500 on receipt thereof, or otherwise £5,500 as damages.The trial Judge gave judgment for plaintiff for the sum of £1,500. On'appeal the Court only wished to hear counsel for the successful plaintiffon the question whether the agreement of 1843 bound only the parties tothat agreement, or whether the obligations therein contained descendedto their heirs. Counsel citing Voet 18, 3, 8 argued that the heirs werebound unless specially exempted, and that the benefits and obligationsof such agreements must be mutual and correlative. The Court thereupondismissed the appeal and affirmed the decision of the lower Court. Thecase of Meyer, Executrix of Smuts v. Meyer ’, is to the same effect.
1 (1868) Bueh. 247.
7 * O-
DALTON A.C.J.—Tikiri Menika v. Lousa Alwis.
The matter was also considered by the appellate division of the SupremeCourt of South Africa in Zandberg v. Van Zyl That case concernedmovable property and the principal question raised was whether theoriginal transaction was really a sale with the right to redeem or in effectmerely a pledge. The law, however, would appear to be the same whetherthe pact deals with movable or immovable property. In the course ofhis judgment dealing with the law De Villiers C.J. refers to the pactumde retrovendendo mentioned by Voet 18, 3, 7 and 8 as being a usual andlegal pact. The stipulation in the agreement (although it was eventuallyheld that the transaction was a pledge and not a sale) was to the effectthat the ostensible vendor was to have the right at any time to repurchasethe property for the price at which it was alleged she had sold it. That,it was held on the same authority, was a perfectly legitimate stipulation.
These, I think, are sufficient authority to show what is the common lawon this first point. The latter case I have cited would also, it seems to me,answer the second question raised on this appeal. I am unable to agreewith Mr. Perera in his argument that the provisions of section 93 of theTrusts Ordinance, 1917, has any bearing on the case before us.
If no time be fixed in the agreement within which the right is to beexercised, it was urged the agreement was bad in law and unenforceable.In the agreement in Joseph’s Executor v. Peacock (supra) however, nothingwas said about time, whilst in Zandberg v. Van Zyl (supra) Innes J.(later C.J.) and Solomon J. (later C.J.) both held that a stipulation to re-purchase and reconvey at any time was quite legal. Mackeurtan, in his Saleof Goods in South Africa at p. 72 in dealing with the pactum de retrovendendoand the jus retractus sets out the law. in the same way. If the right be inperpetuum, for example, if it be exercisable “ at any time hereafter ”, thereis no suggestion that such a stipulation is other than valid, although theauthorities to which he refers are not agreed as to whether the right issubject to prescription. That latter question does not, however, in anyevent arise in the case before us. It was suggested to us that to upholdsuch a stipulation, when unlimited in point of time, might raise difficulties,for instance, as to the title of a subsequent purchaser, but I do not thinkthat in practice they are likely to occur. In any event it is not necessaryto deal with the arguments in support of or against this suggestion, for itcan have no effect in altering the law. If the statute law “places anylimitation directly or indirectly upon the exercise of such a right, theneffect of course must be given to it, but it is not suggested there is anystatutory limitation applicable in the case before us. No authority wascited in support of the learned trial Judge’s conclusion that where notime is fixed the right of pre-emption must be exercised within a reasonabletime; This conclusion, as will be seen from the authorities I have cited,is not correct, although the plaintiffs are still entitled to succeed in theirclaim.
For the above reasons the appeal must be dismissed with costs.
Koch A.J.—I entirely agree.
> (191® A. D. m.
TIKIRI MENIKA v. LOUSA ALWIS