045-NLR-NLR-V-58-A.-H.-M.-ABDUL-CADER-Appellant-and-MRS.-B.-MUNASINGHE-Respondent.pdf
1956Present : H. N. G. Fernando, J.H. 31. ABDUL. CADER, Appellant, and AIRS. B. 31UNASIXGHE,RespondentS. O. 2-5-3—C. li. Colombo, 42,007
Paulian action—Decree setting aside alienation in fraud of creditors—Hoxo far it extin-guishes title of transferee.
Tho setting aside of a deed of transfer in consequence of a decree entered in nPaulian. action docs not revest the property, which was the subject of thotransfer, in the transferor. Tho fraudulent- tlced is not nnmillcd but is onlydeclared void so far ns it is necessary to make the property available forexecution. The titlo to so much of tlic property ns is not rccpiired to be sold in.execution remains in tlic transferee.
– (105-1) -~>7 X. L. If. 110.
-^^-PPKALi from a judgment of tho Court of Requests, Colombo.
K: li. Wikramanayakc, Q.C., with J/. Somasundcram, for tho plaintiff-appellant.
A. Xagendra, for tho defendant-respondent.
Cur. adv. vult.
November 2, 1956. If. N. G. Ferxaxdo, J.—
The property which is the subject of this action belonged at one time toa Doctor Ferdinando, now deceased. B3' his hist will lie devised a lifeinterest in this and other properties to his widow subject to a conditionthat the widow should pay a sum of Rs. 150 a month plus any such medicalexpenses as may be incurred, to the deceased’s sister.
I11 action No. IS,050 D. C. Colombo, instituted in 1917, the sister suedthe widow for monies due under the terms of the last will, and decreewas entered on 1st September 1919 ordering the widow to pay to thesister a sum of Rs. 1,8S5 odd together with costs of the suit. Two dayslater the widow transferred her life interest in all the properties to thepresent appellant by deed No. 2.322 and when the property in questionwas seized in execution of the decree in that action, it was successfullyclaimed by the present appellant. In consequence the sister had to filea Paulian action combined with an action under section 217 of the CivilProcedure Code, (No. 386-Z) for an order setting aside the deed No. 2,322as having been executed in fraud of the sister as judgment creditor,and for a declaration that the property was liable to be seized and soldunder the writ in the action No. 18,650. For obvious reasons the sisterwas successful in this second action, and decree was entered setting asidethe deed No. 2,322 as having been executed in fraud of creditors andordering that all the lands and premises described in the schedule tothe plaint are liable to be seized and sold under the writ in case No. IS,650.Some time after the decree was entered the present plaintiff depositedin Court to the credit of case No. IS.650 the amount decreed to be due tothe plaintiff (the sister of the deceased) in that ease and the amount sodeposited was subsequently withdrawn by the sister.
While action under 3SG-Z was pending, the sister instituted anotheraction (D. C. 21,925) against the widow claiming a further sum of Rs. 5,000odd from the widow as being due under the terms of the last will of DoctorFerclinando, and decree was entered in favour of the sister for that sumand costs in September 1951. Subsequently writ was issued in executionof that decree and the premises now in suit were seized and sold underthe writ to 011c Mr. Mend is.
In the present action the plaintiff (who had purchased the premisesin suit by deed No. 2,322 on October 2nd 1919) has sued tho defendantfor rent and ejectment on tho ground that tho defendant is tho tenantof tho plaintiff and failed to pay rent for the months of October andNovember 1952. The defendant had attorned to the present plaintiff
after his purchase of the property and was clearly the tenant of the-plaintiff. In the ejectment action consent decree was entered, one term,of which was that the defendant would pay rent to the plaintiff in accor-dance with the consent order. She failed however to pay rents afterNovember 1953 and, in terms of the consent decree, the plaintiff hasasked for writ against the defendant on the ground of non-compliancewith the consent decree. In her objections to the application for writ-the defendant takes up the position that the sale to Mr. Mendis in D. C.No. 24,925 and the declaration in the Paulian action No. 3S6-Z haveextinguished the title of the present plaintiff. The defendant accordinglyclaims that she can now deny the title of the plaintiff and is paying therent to Mr. Mendis. The learned Commissioner has agreed with thiscontention and held that the defendant now rightly claims to occupy thepromises ns the tenant of Mr. Mendis.
In my opinion tho decision of tho learned Commissioner is based on a-misconception of tho effect of the decree in the Paulian action. It wasdecided by de Sampayo J. in Gvnawardene v. Bilindaliamy 1 that “ a-fraudulent deed is not annulled but is only declared void so far as it isnecessary to make tho property available for execution ”. Citing thisdictum with approval in Punchi Banda v. Perera el al. 2 Fischor C. J.held that the title to so much of the property as is not required to be soldin execution remains in the transferee. Applying these principles to thepresent case it will be seen that the decrees in the Paulian action No. 386-Zonly rendered the transfer to the present plaintiff void in so far as it wasnecessaiy to make the property available for execution of the decreein fraud of which the transfer took place, that is of the decree in actionNo. 18,650. If, therefore, the property had been sold in execution of thatdecree, the title in the property would have passed from the presentplaintiff to whoever may have purchased it at the execution sale. Butin fact this property was not required to be taken in satisfaction of thodecree because the plaintiff paid the amount of the decree into Court, and'because in any event no further proceedings have been taken to executethat decree. All that lias • happened is that another action (24,925),to which the present plaintiff was not even a party, was instituted byDoctor Ferdinando’s sister against his widow for the recovery of furtherarrears due from the widow. Although decree was entered in that actionin favour of the sister, the deed of transfer in favour of the plaintiff wasnever set aside quoad that decree ; and indeed I do not see how thattransfer could, in law, have been set aside for the purpose of satisfying aclaim which had not accrued due at the time of the transfer. In anyevent what was sold in execution of the decree in Case No. D. C. 24,925and purchased in execution by Mr. Mendis was the right, title and interestof tho widow, and what was precisely held in the case of Punchi Banda v.Perera was that tho setting aside of the deed in a Paulian action docs notrevest the property in the person who originally conveyed in fraud ofcreditors. That being so, the widow did not at the time of tho executionsale under D. G. 24,925 enjoy any interest in tho premises in suit noralso did any such interest pass to Mr. Mendis, the execution purchaser:
/ C. iV. Tt. 05.
(JOSS) 30 -Y. X. n. 355.
Tho order appealed from must therefore be set aside and the case willbe remitted to the Court of Requests for writ to be issued in terms ofthe plaintiff's application therefor. The defendant will pay to the plain-tiff the costs of this appeal and the costs of the- proceedings in which theorder appealed against was made..
Appeal allowed.
* (10 JC) 17 X. f.It. 62.