118-NLR-NLR-V-53-APPUHAMY-Appellant-and-EDWIN-Respondents.pdf
Appuhamy o. Edwin
BIB
4931Present : Gratiaen J. and Pnlle J.
APPUHAMY, Appellant, and EDWIN, RespondentS. C. 224—D. C. Badulla, 8,865
Administration of estates—Executor de son tort—Money decree obtained againsthim—Extent of his liability—Right of creditor to follow property sold by heir.
Property of a deceased person's estate is not liable to be sold in execution of amoney decree obtained against an executor de son tort when such property baaalready been sold earlier by him, as heir, to a third party unless steps are firsttaken in proper proceedings, instituted against that third party, to have theproperty declared bound and executable for the reoovery of the judgment debt.
516
G-RATIAEN J.—Appuhamy t>. Edwin
.^^.PPEAL from a judgment of the District Court, Badulla.
S’. J. V. Chelvanayakam, K.C., with C. Chellappah, for the 2nd defendantappellant.
Cyril E. S. Perera, with W. D. Gunasekera, tor the plaintiff respondent.
Cur. adv. vult.
May 18, 1951. Gratiaen J.—
A man named Pabalis Appuhamy owned certain undivided interestsin the property which is the subject-matter of the present dispute.Pabalis Appuhamy died in 1936 leaving a last will appointing his sonSimon to be the executor of his estate, and under this will his undividedinterests in this property passed to Simon. The validity of the will waschallenged by other members of Pabalis Appuhamy’s family, but it wasfinally upheld after a protracted litigation. Probate was then grantedto Simon, but the precise date on which this took place was not provedat the present trial. It is clear from the evidence, however, that beforeprobate was issued Simon had sold his interests in the land on 4th March,1938, to a man named Charles. The conveyance recites that title to theproperty had passed by inheritance from Pabalis. The genuineness ofthis transaction has been questioned by the. plaintiff, but no specificissue was raised on the point, and it would be quite improper for us toassume for the purposes of this appeal that Charles was not a bona fidepurchaser for value. Later, on 20th September, 1941, Charles sold hisinterests in the land to the appellant.
On 3rd July, 1942, the 1st defendant in this action, who himself ownedan undivided interest in the land, instituted proceedings under the Parti-tion Ordinance in respect of the entire property. The appellant wasjoined in the action as the owner by purchase of Pabalis Appuhamy’soriginal interests, and a decree for sale of the property was duly entered.The appellant purchased the entire property at the auction conductedamong the co-owners for a sum which greatly exceeded the “ upset pricefixed by the Court. It is common ground that by virtue of the provisionsof Section 9 of the Partition Ordinance the title which now passed to theappellant was unimpeachable. In fact, it is on the basis of this grievancethat the present action was instituted. The plaintiff’s complaint was thathis title, which was allegedly superior to that of the appellant, had beenwiped out by the decree (and subsequent sale) in favour of the appellantin the partition action. The plaintiff's alleged cause of action is that the1st defendant (who was the plaintiff in the earlier action) and the appellanthad conspired together to defeat his rights in the property, and weretherefore liable to compensate him in damages for the loss sustained by him.
It will be convenient if at this stage I set but the basis on which the plaintiffclaims that his title had been superior to that of the appellant until it waswiped out by the decree in the partition proceedings which had been insti-tuted and concluded without notice to him. He says that in 2937,
GEATIAEN J.—Appuhamy v. Edwin
51T
J"). A. Perera, a creditor of Pabalis Appuhamy’s estate, had sued Sim on-in D. C. Sadulla 6,436 for the recovery of a debt. The earlier litigationin which Simon’s claim to probate as the executor named in Pabalis’'last will had at that time not yet terminated, and D. A. Perera had there-fore advisedly sued Simon in D. C. 6,436 not qua executor but- as executorde son tort who had intermeddled with the estate. D. A. -Perera was infact a son-in-law of Pabalis Appuhamy and was, in association with others,actively engaged in contesting the last will under which Simon claimedto be both executor and sole lieir. Indeed, a characteristic which themembers of the family seemed to have shared in a marked degree wasa passion for litigation. Simon contested the claim against him in
C. 6,436 with his customary enthusiasm, but on 3rd August, 1937,a money decree was entered against him, as executor de son tort, in favourof D. A. Perera for Us. 1,235.24. Simon appealed to this Court but hisappeal was dismissed on 21st February, 1938. Execution proceedingswere taken out—it is not clear precisely when—against Simon for therecovery of this judgment debt, and on 8th March, 1938 (the date isimportant) the Fiscal of the Uva Province purported to execute the writby selling Simon’s interests in the property which is now in dispute. Thepresent plaintiff was the purchaser at this execution sale. As I have*already stated, Simon had already sold these interests to the appellant’spredecessor Charles.
The argument on behalf of the plaintiff is that, notwithstanding thqearlier sale to Charles, he had become the lawful owner of Simon’s interestsin the property by purchase at the execution sale, and that the 1st defen-dant (i.e., the plaintiff in the partition action) “ acting in fraud and incollusion with (the appellant) and . acting wrongfully failed and neglectedto disclose in the said partition case the plaintiff as a party entitled toany share whatsoever in the said land and during the partition caseproceedings, intending or knowing it likely that prejudice would becaused to the plaintiff and to enrich the appellant, both of them wilfullysuppressed or omitted to produce the relevant deeds and documentswhich would have disclosed the plaintiff’s interests and the title in theland.” In other words, the plaintiff’s case is that he was in these cir-cumstances entitled to maintain against the 1st defendant an action fordamages which was expressly reserved to him by the proviso to Section 9of the Partition Ordinance, and that the appellant, as a joint-tortfeasor,was equally liable in damages because he had played an active part in theconspiracy to defeat the plaintiff’s rights.
At the conclusion of the trial in the Court below the learned DistrictJudge entered judgment in favour of the plaintiff against the 1st defen-dant and the appellant jointly and severally for the sum of Rs. 6,665as damages. The appellant has appealed to this Court from the judgmentin so far as it affects him.
We have had the advantage of a much fuller argument on the questionsof law arising for consideration on this appeal ‘ than the learned DistrictJudge seems to have enjoyed. Mr. Chelvanayagam contends as a matterof law that the plaintiff’s action Jails at the outset because in truth notitle passed to him at the execution sale which took place on the 8th March,1938, and because he was vested with no interests in the property which
518
GKATIAEN J.—Appuhamy v. Edwin
could properly liave been recognised in tbe subsequent partition actioneven if he had been joined as a party to those proceedings. It is clearthat if this contention be sound, the judgment appealed from must beset aside as far as the claim against the appellant is concerned even if theallegation of a conspiracy against the plaintiff be established. The1st defendant , is apparently content to accept liability under the decree.He has not appealed, and his liability to pay damages to the plaintiffwould therefore be unaffected.
It is first necessary to consider what rights passed to the judgment-creditor in D. C. Badulla 6,436 under the decree entered in his favouragainst Simon as executor de son tort of his father's estate. This decreewas one for the payment of a sum of money simpliciter, and did not pur-port to declare any specific asset bound and executable for the recoveryof the judgment debt. The foundation of the action, and the basis ofthe decree, must necessarily have been that the value of the assets of theestate with which Simon had intermeddled (less any sums which he mayproperly have expended for purposes of administration) was not less thanBs. 1,235.24. The decree entered against him as executor de son torttherefore fixed him with personal liability to pay the judgment debt,and the creditor was entitled to recover this amount by the seizure andsaite in proper execution proceedings of either Simon's personal assetsor such assets belonging to the deceased's estate as were in his possessionat the date of the seizure. The creditor could not further demand, by virtueof his money decree, a judicial sale of any property belonging to thedeceased’s estate which were not proved to have been in the possessionof the executor de son tort at the time of seizure. Still less could he claimthe right automatically to seize and sell any part of the estate which hadalready been sold to a third party unless steps were first taken in properproceedings, instituted against that third party, to have the propertydeclared bound and executable for the recovery of the judgment debt.That, I think, is the effect of the decision of this Court in Mytton v.Narchia 1; Kankanama v. JJsifu 2; Prins v. Pieris,3 and Appuhamy v.Banda 4 (although in the last of these judgments Ennis J. consideredthat in the facts of the particular case certain irregularities inprocedure had been sufficiently waived by the objecting ’ party). InAppuhamy v. Cole 5 Sampayo J. held that property belonging to thedeceased’s estate was not liable to be seized in execution of a moneydecree against an executor de son tort because it was not in the latter’spossession at the date of seizure. Applying these principles to thepresent dispute, I take the view that the title which passed to Charlesunder his purchase on 4th March, 1938, was not automatically wiped outat the execution sale which took place at a later date. The propertywas not available in his possession for seizure in. execution proceedingsagainst him at the relevant time. I certainly accept, as settled law tbeproposition that transfers of property, pending administration, by theheirs of an estate are in certain circumstances liable to be defeated at theinstance of an unsatisfied creditor of the estate (vide the authorities
1 (1881) 4 S. C. G. 23.
* (1886) 7 S. C. C. 180.
3 (1901) 4 N. L. B. 3S3.
* (1922) 24 N. L. R. 217.
* (1920) 8 C. W. R. 28.
*.GBATIAEN J.—Appuhamy v. EdwinSIS'
cited by Soertsz J. in Suriyagoda v. Appuhamy *) but this does notmean that the “ defeasible title ” which passes to a third party can bewiped out until a court of competent jurisdiction expressly declaresthe property liable to be soldattheinstance of the judgment-
creditor. It seems to me that the correct procedure which acreditor should adopt toobtainsuch adeclaration is indicated in
MuttiahChetty v. Ukkurala 2. The decision of de Kretser J.
relied on by Mr. CyrilPererainPerera v. Canniah 3 does not
deal with this particularaspectoftheproblem, and there is no
reference in the latter judgment to the steps taken by the creditor tofollow the properly in the hands of a purchaser. I find however froma note of the argument in that case that Counsel who appeared for thecreditor relied on Muttiah Chetty v. Ukkurala (supra) in support of hissubmissions which were upheld by the Court.
It is important to remember that if the judgment-creditor in D. C.Badulla 6,436 had sought, in proper proceedings to which Charles hadbeen made a party, to have the property declared liable to seizure andsale in execution of his money decree against Simon, the validity of hisclaim would have depended upon a number of factors. Had it beenproved, for instance, that Simon's sale to Charles was not a genuinetransaction but merely a fraudulent device to defeat Simon’s creditors,the claim would no doubt have succeeded. Had it been proved, on theother hand, that Charles was a hona fide purchaser for value, and that theproceeds of the sale had been completely or partially expended for ad-ministration purposes, different considerations would have applied. Imention these hypothetical situations merely to emphasise the point thata creditor’s claim to follow the property into the hands of a third partymust be investigated in a regular action inter partes and on proper issues.It is certainly not referable to some automatic right which the law conferson judgment creditors. There is a fundamental distinction between atitle which is liable to be defeated in certain contingencies and a title whichmust necessarily rank below the vested rights of some other claimant.In my opinion the title which Charles acquired on 4th March, 1938, andlater sold to the appellant in 1941, was and continued to be superior tothose which the plaintiff purported to acquire on 8th March, 1938. Whentherefore the partition proceedings commenced in' 1942 the plaintiffhad no vested rights in the property which were capable of recognitionby the Court. I would therefore hold that the plaintiff’s claim againstthe appellant failed a-t the outset, and it is therefore unnecessary toconsider the other interesting questions of law which Mr. Chelvanayagamraised before us.
I would set aside the judgment appealed from in so far as it affects theappellant, and enter decree dismissing the plaintiff’s action against theappellant with costs both here and in the Court below.
Pdlle J.—I agree.
> (1941) 43 N. L. R. 89.
Appeal allowed.2 (1925) 27 N. L. R. 336.
3 (1944) 45 2T. L. R. 337.