APPUHAMY v. THE DOLOSWALA TEA AND RUBBER CO, LTD

064-NLR-NLR-V-25-APPUHAMY-v.-THE-DOLOSWALA-TEA-AND-RUBBER-CO,-LTD.pdf

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Present: Garvin and Jayewardene A.JJ.APPUHAMY v. THE DOLOSWALA TEA ANDRUBBER CO., LTD90—D. C. Ratnapura, 3,508.
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Lease for ninety-nine years—Action for declaration of title against lesseeby third party—Rights of lessor and lessee to claim compensationfor improvements—Bona fide possessor—Mala fide possessor—Islessee for ninety-nine years a bona fide possessor ?
A purchased a land from B and leased it for ninety-nine years toC, who planted it with rubber. D> who was an owner of a share,brought an action for declaration of title. A claimed compensationfor improvements. The District Judge held that A was not a bonafide possessor as he had notice of D’s title at the time of planting,and was not the improver, and dismissed his claim for compensation.
The Supreme Court’ held that A was in the, circumstances abona fide possessor and an improver, and that he was entitled to
compensation.
H878) 4 Cal. 692.
25/22
1928.
2 (1894) 32 Cal. 364.
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1928.
Appuhamyv. The Dolos -wala Tea andRubber Co.,Ltd.
“ There is no reason why such a lessor should not receive com-pensation lor improvements in cases in which he can fairly besaid to be the improver, though the actual work of improvementwas done by his lessee.”
Jayewabdene A.J.—In the case of a lease for a long perioda lessee may be treated as a bona fide possessor.
‘T’HE added defendant, Mr. P. D. G. Clarke, purchased this landJ- and leased it for ninety-nine years to the defendant company,the Doloswala Tea and Rubber Co., who planted it with rubber.The plaintiff disputed the added defendant’s title Jo a certain share,and instituted this action for declaration of title to that share.The defendant company, inter alia, claimed compensation forimprovements. The Supreme Court held on the first appeal thatplaintiff was entitled to a certain share, and that defendant companybeing a lessee was not entitled to compensation. The case wassent back for an inquiry as to whether the added defendant (lessor)was entitled to compensation in respect of improvements effectedby the lessee. The added defendant filed pleading formulating hisclaim. The District Judge held that the added defendant was notentitled to compensation. The added defendant appealed.
The judgment of the Supreme Court on the first appeal is reportedin volume 23 (page 129).
E, W. Perera (with him W. Chas. Silva and Ghohsy), for addeddefendant, appellant.
E. J. Samarawickreme (with him R. L. Pereira and H. V. Perera),for plaintiffs, respondents.
Cur. adv. wit.
October 23, 1923. Garvin A.J.—
The plaintiffs were upon a previous appeal to this Court declaredentitled to two undivided third shares in a land called and knownas the Nahalawaturalayepanguwa. This land had been purchasedby Mr. P. D. G. Clarke, the added defendant, who leased it, togetherwith several other allotments to which he had acquired title, to thedefendants, the Doloswala Tea and Rubber Company. The landwas opened and planted with rubber, and at the time this actionwas instituted the plantation was about eight years old. Anaward of compensation to the defendant company was also setaside on the ground that a lessee who had improved his leaseholdis not entitled to maintain a claim for compensation against athird party who establishes an independent title to the land superiorto that of his lessor. This Court indicated, however, that a lessormight possibly be entitled to claim the benefit of the improvementsmade during the pendency of the lease and successfully maintaina claim for compensation in respect of those improvements. Toenable this lessor to file proper pleadings formulating .his claim
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upon such principles of law or equity as he thought were applicablethe case was remitted to the District Court. The Court, whileexpressing doubt as to whether such a principle applicable to hiscase could be found, granted to the defendant company leave, if soadvised, to formulate a claim if it was thought that the claim couldbe brought within the application of some special equitable principlewhich gave them a right to compensation.
The added defendant duly filed pleadings formulating his claimbut no claim was made by the defendant company.
All that remained, therefore, for the Court to do was to considerwhether the added defendant was entitled to claim compensation,and if so, to determine at what amount the compensation payableshould be assessed.
The District Judge has held that the added defendant is notentitled in law to any compensation, and has assessed at Rs. 165per acre the compensation, which would have been payable had hesucceeded in establishing his right to compensation.
Had the District Judge limited himself to the consideration ofthe two points on which his decision was invited, it would only havebeen necessary to deal with the appellants’ contention that hisdecision on both these points is wrong.
But he has made his judgment a vehicle for conveying his commenton the decisions of this Court on a point irrelevant to the questionsat issue, and in particular on certain observations made by myLord the Chief Justice in his judgment in this very case. Not onlyis he guilty of the solecism of making these comments, but he hasdone so in a manner which is wanting in ordinary courtesy. TheDistrict Judge will do well to remember that this Court undoubtedlypossesses powers which are more than sufficient to deal adequatelywith a situation such as this, and that if they are not exercised inthis instance it would not be wise to provoke their exercise by arepetition of such conduct.
It is well-settled law that in Ceylon a lessee who has improvedhis leasehold cannot maintain a claim for compensation in respectof these improvements against a third party who establishes a titlesuperior to that of his lessor from a source other than the lessor.The law was declared in this sense in the case of Soysa v. Mohideen.1Since the decision of that case nothing new has been discoveredin the writings of the Jurists. But the attention of this Court hasbeen drawn to two South African cases, Bellingham v. Bloommetje 2and Rvbin v. Botha. In neither of these cases was compensationgranted to the improver in his character of lessee of the propertyimproved. Indeed, it was the circumstance that, he was not inlaw the lessee of the premises which enabled him to contend thathe was a possessor who entered upon the premises bona fide, and with1 (1914) 17 N. L. R. 279.* (1874) Buchanan’s Rep. 36.
1928.
Gabvin A. J.
Appuhamyv. The Dolos-wala Tea andRubber Oo.fLtd.
( 270 )
1928.
Gabvin A. J.
Appuhamyt>. The Dotes*wala Tea andRubber Co.,Ltd.
the intention of holding and enjoying the premises, if not as owner,at least for a specified period of time, and entitled in equity to ameasure of compensation assessed on that footing. A lessee isnot in that position ; he is not a possessor in the Juristic sense ofthe term. Moreover, his rights in respect of improvements to theleasehold property are often prescribed in the terms of the contractunder which he holds, and where the contract is silent he had therights which the law gives him.
Rightly or wrongly, the law has been definitely settled by thedecision in Soysa v. Mohideen (supra). That was a decision of a FullBench of this Court, consisting of Judges of the eminence of LascellesC.J., Pereira J., and De Sampayo J., and with their opinion Itrust I might be permitted to record my respectful agreement.
In the case of Lebbe v. Christie,1 Wood Renton C.J. and Shaw J.(Ennis J disserUiente) held that a similar question which came upfor decision was concluded by the ruling in Soysa v, Mohideen(supra), and Shaw J. in the course of his judgment expressed hisagreement with the law as declared in Soysa v. Mohideen (supra),while Wood Renton C.J. decline to discuss a question which hadbeen settled by the Full Bench.
It is this decision and the judgments of these eminent Judgeswhich the District Judge says were “ ignored ” at the first trialin favour of the view he has expressed. Whoever may “ ignore ”a decision of the Full Bench of this Court, a District Judge is boundto follow it, and the only excuse, which I hope I might believe isalso the real explanation, for his omission to do so is that he wasnot aware of the decision.
Is the District Judge right in the judgment from which this appealis taken ? His reasons for rejecting the added defendant’s claimappear to be two-fold. He holds that; he is a mala fide possessor,and also that he was not the improver.
Now, was the added defendant a mala fide possessor ? He gavevalue for this land, and there.is not even a suggestion that he wasnot a bona fide possessor when he entered on the land after hispurchase. Certain evidence’ was called which the District Judgesummarizes as follows :— “ It appears that Punchina, supported byHathenna, went before Mr. Clarke and asserted their claims andprotested against the clearing.” This is the foundation of thefinding that Mr. Clarke was a mala fide possessor. I shall have someobservations to make as to the value of this evidence, and thecircumstances under which it was tendered. But assuming it to betrue, does a mere informal claim such as this convert bona fide intomala fide possession ? The added defendant entered under a title.He has participated in the conversion of land which—judging fromthe prices paid by both Mr. Clarke and the plaintiffs—can hardlyhave been worth more than Rs. 3,000, into a fully developed rubber‘*11916) IS N. L. R. 353.
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estate worth probably fifty times as much. These are facts whichindicate the utmost confidence in the strength of his title. Whenthis action was filed, he strongly maintained that his title was good.The District Judge thought the plaintiffs had established a bettertitle as to five-twelfths of the land; in appeal it was held that theadded defendant’s title was defective as to two-thirds. The matterof title depended mainly upon whether two Kandyan women hadbeen married in binna or in diga, and whether a certain person wasa son bom to a woman married to two brothers in association orbom to her by one of the brothers.
These are questions of the utmost difficulty, >nd even whenthe evidence can be relied on and the facts and circumstancesascertained with some degree of certainty, there may well bedifferences of opinion as to the finding.
The added defendant’s title is one in which he might quitejustifiably have placed the confidence he appears to have done,and I am not prepared to hold that he acted mala fide in developingthis land merely because he repelled two persons who are said tohave claimed an interest in it. Neither of these persons pursuedthe matter any further. They are not even shown to have addressedMr. Clarke through- a proctor, a method of proceeding with whicheverybody is quite familiar. Eight long years elapse, during whichnothing more is heard of these claims, until the plaintiffs, whom theDistrict Judge describes as land speculators, happens upon them,and are now seeking to evade their liability to compensate theadded defendant by raising this plea of mala fide.
I see no reason to doubt that Mr. Clarke’s possession has beenbona fide throughout. He does not, in my opinion, appear ever tohave had reasonable ground for doubting that his title was a goodone.
For my own part I am reluctant to place any reliance on theevidence led to establish the facts upon which this plea is founded.Neither at the first trial nor at the hearing of the appeal, which wasvery fully argued, was there the slightest suggestion that theposses-sion of the defendant or of his lessee was mala fide. The evidencehas obviously been procured in the interval in a final attempt toobtain this valuable property for nothing. So much for the findingthat the added defendant was a mala fide possessor.
The second reason given by the District Judge for rejecting theadded defendant’s claim is that he was not the improver. Theevidence indicates that this land was cleared, and its developmentas a rubber estate commenced for the defendant company by Mr.Clarke, and continued and completed by other servants of thecompany in succession to Mr. Clarke. Nor, indeed? is it denied thatthe actual clearing, planting, and development was made by thedefendant company through its agents and servants. This isregarded by the Judge as conclusive of the question whether or not
1928.
Gabvzk A.J.
Appuhamyv. The Volos-waia Tea andBobber Co., •Ltd.
( 272 )
1928.
Qabvin A.J.
Appuhamyv. The D<Ao8.uxUa Tea andBobber Co.fLtd. .
the added defendant was the improver. His opinion would seemto be, that unless a person can prove that the plantation, building,or fixture which constitutes the improvement was made or erectedby him or by his agent for the purpose he is not an improver in theeye of the law.
But this is surely too narrow and superficial a view. Suppose afather built a house at his expense on land purchased by his sonin the way of a gift to this son. Upon completion of the house theson enters into occupation, but is later evicted by a third person.Always supposing the son to have been a bona fide possessor, is thisthird, party to retain, free of all cost to himself, that which wasintended to be a gift to the son ? I can conceive of no principle oflaw or justice which permits a person to appropriate to himselfthe full benefit of money expended by a father for the purpose andwith the intention of advancing the interests of his son. Whyshould the son’s position be any different to what it would havebeen if he had received the money from his father and expendedit in building the house ?
To take another case. A purchases land and enters into posses-sion in the bona fide belief that he is the owner. In A’s absencefrom the Island B purchases the land, and in ignorance of A’s titleenters into possession and builds on it. On A’s return he sues Band evicts him, but is ordered to pay compensation to B for theimprovement made by him. A pays B and enters into possessionagain. X succeeds in establishing a title superior to that of A.Surely A, who has paid for the improvements made by B, is himselfan improver and entitled to be compensated by X though he didnot build the house. Otherwise X will be left the owner of a housefor which A has had to pay B, while A gets nothing.
These hypothetical cases are I think sufficient to show that aperson who did not make or erect the plantation or building whichis claimed to be an improvement himself or by an agent for thepurpose may nevertheless be the improver in respect of that plan-tation or building. There are no decisions of this Court on thepoint, nor does there appear to be anything in the text writers whichthrow any light on the matter. This important and difficultquestion must, therefore, be decided on first impressions. Whetheror not a bona fide possessor can be considered to be an improvermust depend upon a consideration of the circumstances of eachcase ; he cannot be denied the rights of an improver merely becauseit was not his hand or the hand of his agent that made or erectedthat which constitutes the improvement.
The case under consideration is that of a bona fide possessor whoclaims to be an improver in respect of a plantation made by his lessee.An owner may occupy and develop his property himself. To doso by leasing the property is another method of possessing andenjoying one’s property. A bom fide possessor who leases his
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property still remains the possessor, though the right to occupyand enjoy it is conceded to the lessee. There is, therefore, no reasonwhy such a lessor should not receive compensation for improvemetsin cases in which he can fairly be said to be the improver, thoughthe actual work of improvement was done by his lessee. In thecase of improvements made by a lessee under circumstances in whicheither under the terms of the lease or by operation of law the lesseebecomes entitled to receive compensation from the lessor, and suchcompensation is paid at the termination of the lease, I can see noobstacle to the claim of the lessor that he in turn is entitled to becompensated as a bona fide improver in the event of eviction by athird party ; nor can I see that there is any material difference inthe position of the lessor when no compensation is paid or payableso long as a corresponding benefit has been secured to the lesseeby mutual covenants or by a substantial reduction in the rent.A bona fide possessor is entitled to appropriate to himself all thefruits and profits derivable from the proper use of the land. If inconsideration of improvements to be made by his lessee he makesa substantial reduction in the rent or remits it altogether, is he tolose both the rents as well as the right to compensation for theimprovements so brought into being by him ? Nor do I think itmakes any difference that the eviction takes place during thependency of the lease so long as the improvements were made bythe lessee under circumstances in which the lessor is placed undera liability to his lessee in respect of such improvements. It mightI think be assumed that as a general rule a lessee will not improvethe leasehold unless he is assured of or receives directly or indirectlysome compensating advantage or benefit from his lessor eitherunder the contract of lease or under the general law. Is the lesseeto have this benefit or advantage, the owner who successfullyvindicates his title to retain the improvements, and the bona fidepossessor who leased the property and thus caused the improvementsto come into being to bear the loss ? In cases such as these alessor who has thus caused the improvements to come into being,and has directly or indirectly compensated the lessee or has assumeda liability to do so, is in my view entitled to claim to be compensatedas an improver in the event of eviction by a person with a superiortitle.
There is a class of cases, however, which must not be lost sight of.They are rare, but that is not a sufficient reason for ignoring them.A lessee may conceivably make improvements under circumstanceswhich give him no right to compensation, and even where he hasreceived no corresponding benefit or advantage from his lessor, andeven without his lessor’s knowledge. In such cases it will in allprobability be held that inasmuch as the improvements have costthe lessor nothing, and were not made with the deliberate intentionof benefiting him personally, and as he has incurred no legal liability
xxv.12(60)20
1*28.
Gabvut AJ-
Appuhamyv. The Dolos-icalo Tea andBobber GoLtd.
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1988.
Gabvtk AJ.
Appuhamyv. The Dolos~wod^Tea mdRtibber Co.,Ltd.
to the leasee, he should not be permitted to make a profit at theexpense of his lessee, and that the benefit of the improvementsshould go to the true owner.
But this is not such a case. The added defendant purchasedthis land in April, 1912. He appears to have entered into negotia-tions with the defendant company almost immediately, and it isadmitted that he acted as manager of the defendant company fromJanuary 1, 1913, till October, 1915, the period during which theclearing and planting was done. The formal lease to the defendantcompany was not made till January, 1915, but it provides that thelease is to be deemed to have commenced to run on January 1,1913.This lease relates, not only to the land which is the subject of thiscase, but to numerous others as well. It would seem, however, thatMr. Clarke was the actual planter of this land, though he did so asagent of the company, and that at the date when the company wasformally vested with the leasehold the land had been opened andplanted.
The lease clearly contemplates the development of the land. Thecircumstance that it does not compel the lessees to develop the landis of little importance. This land is situated in a rubber-growingdistrict, and it is difficult to imagine that a company would buy itand not open it. But there is the fact that they did clear andplant it even before the deed was actually signed. The low rentalis another factor of importance. It is only Be. 1 per acre per yearfor the undeveloped land, to be increased as the land is developed,the maximum rental is the low rate of Rs. 3 per acre for the developedland. The lessees, in consideration of the covenants, and presumablymainly in consideration of the low rental, have actually developedthis land. The lessor, in contemplation of the development of theland, which had in point of fact been commenced by him on behalfof the company, leases this land, for a long term at a low rental.He has covenanted to secure the lessees in the enjoyment of premises,and by reason of all the circumstances to which I have adverted,now lies under a heavy liability to the defendant company, parti-cularly in respect of the improvements which were contemplatedby both parties to the lease, and had in fact been commenced andwere far advanced at the date of the lease.
It was the relationship between the added defendant and thedefendant company which resulted in these improvements, and,indeed, the purpose of that relationship would seem to have beento develop this land.
In my opinion the added defendant is an improver, and entitledto be compensated as such.
It only remains for me to assess the compensation to which theadded defendant is entitled. Learned counsel contends that inno case should the added defendant receive a large sum by way ofcompensation that is recoverable by his lessee. He contends that
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the compensation payable as between the added defendant and thedefendant should be assessed in accordance with the provisions ofthe Placaat of September 26, 1658, which only allows to the lesseethe mere cost of the trees at the time of planting. If this contentionis to prevail in such a case as this, the so-called right to compensationis worthless, and these proceedings a mere farce. Now, an examina-tion of the Placaat shows that it did not contemplate agriculturalenterprises of the nature of tea or rubber plantations which are ofa permanent character. In the next place, counsel has not beenable to give me either authority or reason for supposing that thisPlacaat was ever in application in Ceylon. On the contrary, theindication in the local cases is that in cases in which the lessee’sright to compensation is established, the amount of suchcompensation should be assessed upon the same basis of assess-ment as is applicable to the case of a bona fide possessor.These improvements have been made with the consent andacquiescence of the lessor, and under a lease which certainlycontemplated the making of these improvements if that was notalso the principal purpose of the lease. Whatever the exact amountrecoverable by a lessee as compensation or damages may be, thereis no reason in this case to suppose that it will be less than the amountascertained by assessing it on the basis of the compensation payableto a bona fide possessor. That is the basis upon which compensationshould be assessed in this case. The Chief Justice has expressedthe opinion that in this case the compensation should be assessedat the amount actually expended in making the improvements.I do not think that the expenditure after the sixth year should beallowed. The. trees in this plantation were tapped in the year 1919.Any expenditure incurred thereafter was presumably in the natureof maintenance, and should in any event be set off against the grossprofits. Evidence has been led to establish that the expenditureon this property up to the time tapping was commenced wasRs. 534*26 per acre. It is contended that the evidence falls shortof proof that that amount was actually expended on developmentduring that period. The figures as excerpted from the company’sbooks are set out in document D 1. Their accuracy was apparentlyassumed at the first trial, but at the second trial they were impeachedon the ground that the clerk who compiled the document D 1 hadnot been called. They are also impeached on the ground thatMr. Huston admitted there was a discrepancy in the figures for oneyear as compared with certain figures taken out by him. It is notsaid what the discrepancy amounted to, but one is struck with thefact that the totals for each year do not differ very largely from thefigures given by Gamier in his book, which the Judge and the partiesregard as reliable. Gamier’s figures for six years is Rs. 380. Thecost to the company from January 1, 1912, to the end of 1917 isRs. 491*54. The company’s figure for the year 1918 is Rs. 42*72
1928.
Gabvin
Appvhamyv. The Dolce-walaTeaendRubber Co.9Ltd.
( 276 )
1928.
Gabvxk A.J.
Appuhamyv» The Doles*twrio Tea andRubber Co.,Ltd.
Unfortunately Garnier’s figure for the seventh year of cultivationis not given. But the fact that his figures for the preceding twoyears is Rs. 40, the company’s figure seems reasonable. This willgive a total of Rs. 420 against the company’s figure of Rs. 534*26.Allowing for any inaccuracies in the company’s figures, I think theoost to them could hardly be short of Rs. 450 per acre. It may bethat the company has actually spent more. If the award is lessthan what they had actually expended, they have themselves toblame for not placing strict proof before the court. To the damagesassessed on this basis of Rs. 450 per acre must be added the costof a cooly line, which is assessed by the District Judge at Rs. 750.The total amount payable is, therefore, approximately Rs. 32,000,but the exact amount will be computed and ascertained by theDistrict Judge on the basis of Rs. 450 per acre, together with Rs. 750for the cooly line.
I would, therefore, allow this appeal, and direct that judgmentbe entered for the added defendant for the amount so ascer-tained. Until compensation is paid to him in full, the addeddefendant will be entitled to retain possession. He will also beentitled to the costs of this appeal and of the second trial in theCourt below.
Jayewabdene A.J.—
I agree. I do not think it is satisfactory that I should merelygive a silent assent to the judgment just delivered, which I havehad the advantage of reading, and I desire to state my own viewsshortly. I need not repeat the facts of the case. In the judgmentdelivered on the first appeal, it was decided by this Court that alessee not having the civilis possessio was not entitled to claimcompensation for improvements effected by him during the pendencyof the lease, even as against a third party, unless he can establishsome equitable considerations which would induce the Court to granthim such compensation. In doing so this Court felt itself boundby the decisions of two Full Court cases, Soysa v. Mohidem (supra)and Lebbe v. Christie (supra). The case was, therefore, sent back forthe defendants, the lessees, and the added defendant, the lessor,to formulate their claims for compensation. The lessees took nosteps to establish any equitable ground on which they would beentitled to compensation, but the added defendant amended hisoriginal answer and claimed compensation for improvementseffected by him and by his lessees. In my opinion, and for thereasons given by my brother Garvin in his present judgment,the lessor is in any case entitled to claim compensation for improve-ments. A consideration of the terms and objects of the lease leadsone to this conclusion. The lessor is in possession of the landthrough his lessee, and the lessee makes the improvements as the
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agent of the lessor. For instance, in Soyrn v. JHohideen (supra)De Sampayo A.J. said:—*
“ It is good law that a fiduciary when he hands over the propertyto the fidei commissary is entitled to claim compensationfor any useful improvements he may have made duringhis possession (Voet 36, 1, 61), and probably HerbertEdwin’s (i.e., the lessor’s) legal representative might makesuch a claim in respect of the improvements made throughthe lessee, the defendant ” ;
and Pereira J. remarked :—
“ It may be that the lessor or his legal representative may claimthe benefit of the lessee’s improvements and be entitledto compensation ”;
although neither Judge gave a definite ruling on the point. I am,however, not prepared to hold that in no case is the lessee entitledto claim compensation for improvements from a third party. Sucha case, in my opinion, is the case of leases for long periods, suchas a lease for ninety-nine years, where a lessee may be treated asa bona fide possessor. Wille in his Landlord and Tenant in SouthAfrica, page 207, says:—
” In the Supreme Court of the late South African Republic,Kotze C.J., in the case of Rex v. Stamp} followed Grotiusand Morula, and held that ‘ as the lessee has a right ofhis own, it follows that he must have a remedy for theprotection of that right, for ubi ius ibi remedium.’ In thecase of Collins, N. 0. v. Hugo and the Standark Bank} thesame Judge held that under a duly registered long leasethe tenant received ‘ a sort of beneficiary ownership, utiledominiumand that under a duly registered lease for solong a period as ninety-nine years the tenant obtained a‘ real ’ right over the property leased, and that the leaseought therefore to be regarded as immovable property.In three subsequent cases (Johannesburg WaterworksEstate and Exploration Co., Ltd., v. Registrar of Deeds}Ex parte Montorio} Brooke v. Directors of the Corner EstateCo.6) leases of immovable property for periods of ninety-nine years were held to be immovable property.
“ The Supreme Court of the Transvaal has held (Rolfes, Nebelds Go. Jo. Zweeigenhaft6) that to the extent to which, bythe Roman-Dutch law under the maximum huur goat veerkeep, a purchaser was obliged to recognize a lease not in
(1879)1877-1887 Kotze 66.*(1897)4 Off. Rep. 279.
(1893)Hertzog Z. A. R. 176.*(1897)4 Off. Rep. 306.
(1897)4 Off. Rep. 76.•(1903)T. S. 193.
1928.
Jatbwab-DZKS A*J.
Appuhamyv. The DolO**u>ato Tea andRubber Co.,Ltd.
( 278 )
1928.
Jaybwab-
DBETB AJ.
Appuhamyv. The Dolos-ivaloTeaandHubher Go.,Ltd.
longum tempus, the tenant received a qualified ins in re.If a tenant enters into a long lease, which was not dulyregistered, he obtains only a personal right against thelandlord (Smith v. Family’s Trustee1); if duly registered,
‘ the lease is of the nature of an alienation, and partakesof the nature of immovable property ’ (Fatuous* Executrixv. Bezuidenhout2); if duly registered for so long a periodas ninety-nine years, a lease is immovable property, i.e.,it confers a real right on the tenant (Ex parte Master ofthe Supreme Court8).
“As a result of the above authorities, the juridical nature ofa tenant’s right under a lease may be stated to be asfollows:—
Under a short lease:
Under a long lease :
If duly registered.—The tenant obtains a realright to the property as against all persons otherthan a creditor under a mortgage bond whichhas been duly registered against the same pro-perty before the lease was registered (c/. HendersonConsolidated Corporation, Ltd., v. Registrar ofDeeds«)”
Ilia element of registration may be disregarded in applying thisprinciple locally. This seems to be in accordance with what Domatlays down in his Civil Law, bh. 7, tit. 4, see. 10 (Strahan’s Tran•elation). He says:—
“ Emphyteutical leases or leases for perpetuity or a long termof years have been a consequence of the leases of farms.For since the owner of barren lands could not easily findtenants for them, a way was invented to give in perpetuitysuch kind of lands on condition that the grantee shouldcultivate, plant, and otherwise improve them, as the word‘ emphyteusis ’ signifies. By this agreement the proprietorfinds, on his part, his account by assuring to himself acertain and perpetual rent; and the perpetual tenantfinds likewise his advantage in laying out his labour andindustry to change the face of the ground and to make itfruitful ”;
*(1904) T. S. 96$.
(1903) T. S. 41.
» (1906) T. S. 563.« (1903) T. S. 661.
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and in paragraph HI. of the same section he says
“ Perpetual leases are distinguished from the common leases offarms by two essential characters which are the foundationof the rules that are peculiar to perpetual leases. Thefirst is the perpetuity of the lease, and the second is thetranslation of a kind of perpetuity ” ;and in a note he observes :—
“ There are some emphyteutioal leases which are not perpetual,but only for a long term of years, such as a hundred orninety.nine.”
The owner’s right in the property in such leases is called “ directproperty,” and the tenant’s right is called “ useful property.” Headds in paragraph 8 :—
“ It follows from the nature of these perpetual leases that all theaccidents which destroy only the revenues or the improve-ments made by planting, building, and others of whatkind soever they be, that are made by the perpetual tenant,are his loss. For he was obliged to make improvements,and it was for his behalf that the estate was improved.And the accidents which destroy the land fall both uponthe owner who suffers the loss of his estate and likewiseon the perpetual tenant who loses the improvements whichhe had made upon it.”
But there is nothing in my opinion to prevent a lessee refrainingfrom asserting his claim to compensation and permitting the lessorto do so. The lease in the present case is one for ninety-nine years,but the claim of the lessees was not pressed on that ground. Onthe same ground, I think, may be justified the allowance of compen-sation to a transferee of a lessee for fifty years in Hewauntarane v.Dangan Rubber Co., Ltd.1
In the present case there is no conflict of claims between thelessor and lessee, and the lessee is satisfied to let the lessor obtaincompensation for his improvements.
There remains the question whether the lessor was a bona fidepossessor. In addition to the reasons given by my brother Garvinfor holding that the lessor was a bona fide possessor, I may refer tothe observations of this Court in the Dangan Rvbber Company’sCase (supra), where the company’s right to compensation wassought to be defeated on grounds similar to those alleged here.There Wood Benton A.C.J. said (at page 51):—
“ He (the District Judge) holds it to be a mala fide possessor,however, and, therefore, disentitled to compensation,because the work of developing the estate was continuedwithout inquiry after the plaintiffs had, by their letter
»(J9I3) 17 N. L. R. 49.
1828.
JATOWAB-
DKRB A. J.
Appuhamyv. The Doles-mala Tea andRubber Co,,Ltd.
( 280 )
dated January 28, 1907 (A D 1), warned Mr. Martin, oneof the syndicate, from whom the company purchased,of their claim. But mere notice of an adverse claim isnot sufficient to establish bad faith against a purchaser.
‘ A bona fide possessor need not necessarily be the ownerof the property possessed, nor need he have a legal rightto possess it. It is sufficient if his possession is the resultof an honest conviction in his mind of the right to possess/(Pereira: Right to Compensation for Improvements, pp.21, 22.) ”
And Pereira J., at page 55, said :—
“ I do not think that there is anything in the evidence to showthat the appellants did not act in the honest belief thatthey were entitled to the lands in dispute. The mere factthat a claim was made to them by the respondents isinsufficient to show that the appellants acted mala fide,especially in view of the fact that the respondents took noaction to have their rights declared by the Court for nearlythree years. I see no reason to doubt that the appellantswere bona fide possessors in the strict sense of the term, andI hold that they are entitled to compensation . . . . ”
In my opinion, therefore, the added defendant was a bona fidepossessor, and, in view of the previous judgment of this Court,he is entitled to maintain his claim for compensation for improve-ments. I also agree to the quantum of compensation allowed.
Lastly, T wish to say a word with regard to the attitude taken upby the learned District Judge towards the judgment of my Lordthe Chief Justice. I do not think he has approached it in the properspirit- This Court, I am sure, does not claim to be infallible ; likeall human institutions.it is liable to err. It would always welcomecomments on its judgments where such comments are based on soundreason or authority, especially when such comments proceed fromCourts of inferior jurisdiction. But to question the correctness ofa considered ruling of this Court by saying, as the learned DistrictJadge says in his judgment, that it does not agree with what hehas “ read of the old Jurists ” is of little value, particularly in viewof the Chief Justice’s remark that he has “ not been able to findany discussion or even allusion to this question either in the originalRoman texts or in the Dutch Commentaries upon them/1 Afterreading his judgment, one cannot help feeling that the learnedDistrict Judge would have been better advised if he had adopteda more respectful tone and language in his comments.
1928.
Jayuwab-DBNB A.J.
Appuhamyv. The Volos-wata Tea andRubber Co.,Ltd.
Set aside.