Amarasekera Appuhamy v. Mary Nona.
1946Present:Howard C.J. and Soertsz S.P.J.AMARASEKERA APPUMAMY, Appellant, and MARYNONA, Respondent.69—D. C. Ratnapura, 7,334.
Fraudulent alienation—Sale of land to defendant—Subsequent settlementorder, under Land Settlement Ordinance, in vendor's favour—Vendor'sfraudulent and collusive re-sale to plaintiff subsequently—Priorregistration by plaintiff—Defendant's rights—Plea of exceptio doli—Registration of Documents Ordinance (Cap. 101), s. 7 (2).
Where P conveyed a land to the defendant pending settlement underthe Land Settlement Ordinance and, subsequent to the publicationof a settlement order in P’s favour, sold it again fraudulently andcollusively to the plaintiff—
Held, that, according to the Roman-Dutch law, the defendant, whowas in possession of the land, could raise the defence of exceptio doli.It was not necessary to make P a party to the action.
Held, further, that as the transaction between P and the plaintiffwas a sham the priority obtained by the prior registration of theplaintiff’s deed was defeated.
HOWARD C.J.—Ama-arekera Appuhamy v. Mary Nona.
^ PPEAL from a judgment of the District Judge of Ratnapura.
H. V. Perera, K.C. (with him E. A. P. Wijeyeratne), for the defendant,appellant.
N. E. Weerasooria, K.C. (with him E. B. Wikramanayake), for theplaintiff', respondent.
Cur. adv. wit.
March 11, 1946. Howard C. J.—
In "this case the defendant appeals from a judgment of the DistrictJudge of Ratnapura declaring the plaintiff entitled to the land claimedin the plaint, but subject to her paying compensation of Rs. 750 up toNovember 9, 1943. The defendant was allowed a jus retentionis untilcompensation was paid. Prior to 1937 the land in dispute was taken upfor settlement under the provisions of the Land Settlement Ordinance(Cap 319). Prior to the publication of the settlsment order one Podi-nona by deed of February 8, 1938 (D 2), conveyed the land inquestion to the defendant for valuable consideration. On the same dayPodinona wrote D 3 to the Settlement Officer intimating to him that shehad sold this land to the defendant and that Crown grant be made inthe latter’s favour. The defendant by letter D 5 of the same date alsowrote to the Settlement Officer asking that Crown grant be made in hisfavour. Thereafter the defendant entered into possession of the landand planted it with budded rubber. By a settlement order dated June 6,1940 (P 1), and published in the Government Gazette of April 1, 1941,Podinona became entitled to the land in question. By deed ofAugust 11, 1941 (P 2), Podinona sold the land in question to the plaintiff.By virtue of this deed the plaintiff claimed the property. The defendantwho bases his claim on D 2 contended that the plaintiff and her husbandwere fully aware of the facts and had acted fraudulently and collusivelywith Podinona. The defendant asked for the dismissal of the plaintiff’saction or in the alternative a jus retentionis until a sum of Rs. 750 hadbeen paid to him by way of compensation for improvements. Theplaintiff by her reply denied her knowledge of D 2 or that she had actedfraudulently or collusively with Podinona. The District Judge hasfound that the transfer of August 11, 1941 (P 2), by Podinona to theplaintiff was executed fraudulently and in collusion between Podinonaand the plaintiff or her husband. In spite of this fraud the DistrictJudge has held that the plaintiff can claim rights on the land. Hecomes to this conclusion in view of the fact that P 2 was a deed executedby Podinona after she was vested with title by-the settlement order P 1.
Mr. Perera, on behalf of the defendant, has contended that in viewof the finding of fraud the plaintiff’s claim cannot be supported.Mr. Weerasooria, on behalf of the respondent, has not challenged theJudge’s finding on the question of fraud. In view of Podinona’s evidencesuch finding could not be challenged. Podinona, who was called by theplaintiff, stated in evidence that the plaintiff and her husband saw herand asked her for a deed after she had obtained the Crown grant. She
HOWARD C.J.—vlmarasekera Appuhamy v. Mary Nona.
told the plaintiff and her husband that she had sold the land to a personand might get into trouble. The plaintiff’s husband according to Podi-nona said there was no harm about it. It is difficult to conceive of aclearer case of fraud. Can the plaintiff in these circumstances putforward a claim to the property ? The defendant is in possession andit is argued that according to Roman – Du tch law he can raise the defenceof exceplio doli which is a plea in rem going to the merits and foundedon the same facts as give rise to an action based upon fraud. It may.beraised against all persons who have acted in a fraudulent manner. Thereis therefore no substance in Mr. Weerasooria’s contention that the de-fendant cannot succeed in this action unless Podinona is joined as a partyand a claim is made for the setting aside of P 2. Authority for theproposition I have outlined is to be found in Nathan’s Common Lawof South Africa, Vol. IV., paragraph 2170. We have also been referredto the case of VaUipuram v. VaUipuram1. The headnote of this case isas follows :—
“ X was the original owner of a certain land. On September 15,1928, he transferred it on a Bill of Sale to his son-in-law A, who inturn transferred it similarly to P on February 17, 1929. D obtainedjudgment for a sum of Rs. 123 against X in 1918. On September 14,1928, he applied for writ against X. In execution of this writ, theland was seized and sold against X, on January 9, 1929, 13 becomingthe purchaser. He obtained a Fiscal’s transfer in his favour onApril 8, 1929. In an action for declaration of title brought by Pagainst D.
Held, that once it is established that P was a party to the fraud,whereby it was attempted to prevent D from executing his judgment,the deed in his favour can be set aside without making X and A partiesto the present action.
Per Dalton J. “ …. even if it be decided that X and his
son-in-law should be parties, under the circumstances here, the onlyorder I should make would be to send the case back to allow defendantto have them added, with the same result ”
In VaUipuram v. VaUipuram as in the present case the plaintiff whohad been guilty of fraud endeavoured in spite of such fraud to set up histitle. The defendant successfully pleaded this fraud without makingthe transferor to the plaintiff a party to the action. Another authorityto the same effect is the Divisional Court case of Suppiah Naidu v.Meera Saibu 2 the headnote of which is as follows :—
“ Plaintiff’s predecessor in title bought the lands in dispute in thiscase on a writ against one Hamidu who had previously gifted themto the 3rd, 4th and 5th defendants. In an action by plaintiff fordeclaration of title.
Held, that it was open to plaintiff to raise an issue as to whetherdeeds of gift executed in favour of defendants were fraudulent, andthat it was not necessary, for the decision of this issue, to make thedonor a party to the action ”.
s (1930) 7 Times Law Reports, 99.
(190T) 3 Balasing/iam, 129.
CANNON J.—Aiyasathumma v. RetnaHngham.
Apart from the defence set up by the defendant based on Roman-Dutch law, Mr. Perera has also called in aid the Privy Council case ofHall v. Pelmadvlla Valley Tea da Rubber Co., LtdA In that case it washeld by their Lordships of the Privy Council that the transaction whichwas being considered was a sham never intended to be anything morethan a device for getting priority over the respondent’s claim and thatthis amounted to fraud or collusion within the meaning of section 7 (2)of the Registration of Documents Ordinance (Cap. 101). In thesecircumstances the priority of the plaintiff’s deed by prior registrationwas defeated. So in the present case the transaction between Podinonaand the plaintiff was a sham and the priority obtained by the registrationof P 2 is defeated.
For the reasons I have given the defendant is entitled to succeed.The judgment of the District Judge is set aside and judgment must beentered for the defendant dismissing the plaintiff’s action with costsin this Court and the Court below.
Soertsz S.P.J.—I agree.