054-NLR-NLR-V-07-DE-ZILVA-v.-CASSIM.pdf
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n*;»3.
September 8.
DE ZILVA v. CASSIM.
D. C., Colombo, 11,747.
Fraud—Resulting trust—Colourable assignments—Right of assignor to cancel
deed for failure of consideration—Letters of administration to estates of
persons dead before the passing of the Civil Procedure Code.
No man can set up his own fraud to avoid his own deed.
But where the purpose for which an assignment is made is notcarried into execution and nothing done under it, the mere intention toeffect an illegal object, when the assignment is executed, does not deprivethe assignor of his right to recover the property from the assigneewho has given no consideration for it.
It is not sufficient to prove that there was some sort of a benamt(confidential) transaction between the assignor and the assignee, as theresult of which the assignee did not pay the – whole consideration for hispurchase. There must be proof that no consideration was paid for it.
Persons who engage intransactionsinvolvinga resultingtrust must
not expect the assistanceof courts toextricatethem fromthe difficul-
ties in which their own improbity has placed them.
The rigors of section 217 of the Civil Procedure Code do not applyto the case of persons who had died before the passing of the CivilProcedure Code (1889).
T
HE plaintiffs prayed for a declaration oftitle forthemselves
and their co-owners in regard to a house, and they prayed
also that it be sold under the provisions of the Partition Ordi-nance.
The house belonged originally to the estate of the late Dr. Missoand his wife, whose will directed that their joint estate be dividedinto nine equal parts among their children and grandchildrenspecially named in thewill. Thedeviseesso named were to
enjoy their shares during their natural lives, and after .theirdeaths their shares were to be divided equally amongst theirchildren. One of the nine original devisees was a daughternamed Sophia Dorothea Kelaart, and the house in question fellto her share. The executors did not convey to the heirs theirseveral portions, but in a partition case No. 53,924 this propertyand some others were directed by the court to be sold .in 1869.Sophia Dorothea Kelaart purchased it, subject to the conditionsof the will, and possessed it Jill her death in 1883. She had eightcjiildrea, all now dead, and the parties before the Court werethe descendant^ of those children and purchasers from some ofthem.° t
One of the eight children of Sophia Dorothea was Francis,who survived his mother. In *1884 he sold his • interest in thehouse to one K. David Perera by, deed marked P 7. Francis diedin 1887, leaving a widow (the second added defendant) and two
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children (the third end fifth added defendants). K. David Perera, 1903.died in 1895, having by his last will appointed certain executors, September 8.who, as the third, fourth, and fifth plaintiffs in the case, claimedFrancis’s one-eighth share.
Francis’s widow, Priscilla, impeached the validity of deed P 7on the ground that it was not intended by her husband to be avalid conveyance, but that it was executed in collusion withDavid Perera, without any consideration, for the purpose ofavoiding a seizure in execution by a creditor. She deposed thatafter the signing of the deed her husband joined with the otherco-owners in collecting the rents, and that after his death in 1887she lived in a part of the premises for several years, and exercisedrights of ownership over her share by leasing it, &c.
The Additional District Judge (Mr. Felix Dias) upheld thedeed, as it showed good consideration on the face of it and as thenotary swore that the vendor had acknowledged to him to havereceived the full consideration of Rs. 1,000 before signing thedeed.
The claim of Priscilla (the second added defendant) and herchildren (the third and fifth added defendants) and the husbandof the third added defendant to an undivided one-eighth shareof the premises in dispute being dismissed, they appealed.
The case was argued before Wendt, J., and Middleton, J., on26th and 27th August, 1902.
Domhorst, K.C., for the second, third, fourth, and fifth addeddefendants, appellants.
Van Langenberg, for the third, fourth, and fifth plaintiffs,respondents.
Cur. adv. vult.
8th September, 1903. Middi.eton, J.—
This was an appeal from a decree in partition proceedingsdismissing the claim of the second, third, fourth, and fifth addeddefendants to one-eighth share of a house No. 50, Fourth andFifth Cross streets, Pettah.
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The second added defendant was the widow of. one FrancisGerard Kelaart, and the third and fifth added defendants theirchildren, the fourth added defendant* being the husband qf thethird.
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The property was derived from one Sqphia Dorothea Kelaartwho had eight children and died in 1883.»
Francis G. Kelaart died ‘ in 1887, but on* the 29th September,1884, he executed a notarial deed No. 1,541 (P 7), by which heconveyed his one-eighth, share irf the house in question, in a
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1903. boutique No. 8, St. John’s road, and in a house and ground atSeptembers, jfo. <>, St. Lucia’s street, for Rs. 1,000 to Kankanige David Perera
Middle to if, of the Pettah.
J.David Perera died in July, 1891, and the respondents are hisexecutors.
The appellants now allege that the conveyance to David Pererawas made collusively with him with the intention of defraudingFrancis Kelaart’s creditors, and without consideration, and -seekto set it aside, and show the real nature of the transaction, andthat the property was not intended to pass under the instrument—in fact, was, what is known as a benami transaction in India.
As an alternative, they allege that they have had possession ofthe said one-eighth share of the house in question for upwards often years, adverse to and independent of the said David Pereraand his successors in title.
As a further and preliminary objection to the title of therespondents, the, appellants say that, although the estate of SophiaKelaart was above the value of Rs. 1,000, letters of administrationwere never taken out, and that the conveyance by Francis (LKelaart to David Perera was in contravention of the terms ofsection 547 of the Civil Procedure Code, and gave no title.
I am unable to discover what is the Roman-Dutch Law bearingon matters of this kind, so am driven to follow such generalprinciples of the English Law as appear to be applicable byanalogy.
It is a principle of Roman-Dutch Law that no one can beallowed to avail himself of his own fraud, and of English Lawthat a man cannot set up his own fraud to avoid his own deed;but it has been held (Symes v. Hughes, L. R. 9 Eq. 475) that,where the purpose for which an assignment is made is not earnedinto execution and nothing is done under it, the mere intentionto effect an illegal object when the assignment is executed doesnot deprive the assignor of his right to recover the property fromthe assignee who has given no consideration for it (May OnFraudulent and Voluntary Disposition Property, p. 470-1).
This principle seems to have been adopted in the Bombay HighCourt by West, J., in Chenvir/ippa v. Puttappa, I. L. R., 11 Bombayr708 (713-719), 1887, where the Judges were unwilling to affirm thebroad principle adopted in Calcutta (Ram Sarum Singh v. Musst.Pran Pearee Moore’s', 1 A., p. 551) that the real nature of thetransaction may bfi shown either by the defendant or by a partyclaiming under him, and even- where the object of the transactionis to obtain a shield against a creditor, thus enabling the parties asbetween themselves to show that the property was not intended to
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));lss by the instrument creating the benami (Caspersz On Estoppel 1003.by Representation and Res Judicata, pp. 72, 73). Sargent, C.J., September g.iu Babaji v. Krishna, I. L. R. 18 Bombay, observed “ that there Middleton,«as no authority which questions the right of a defendant toJ-'
..lead such a defence, i.e., the truth as to fraud and collusion,whatever doubt there may be as to the plaintiff’s right to avoid hisown deed by setting up his own fraudulent act.
In this case the respondents, although called added defendants,were interveners in the partition proceedings with a view toasserting their claim to one-eighth share of which they were notin possession, and are more in the nature of plaintiffs than .defendants.
In my opinion, the true principle to follow is that adopted bythe English Courts and followed by West, J.
The first question to be asked here then is, was the creditorcefrauded by the deed P 7 ?; secondly, was there consideration forit?
The only evidence given as to the defrauding of Andriesz, thecreditor, is by Priscilla, the widow of Francis Gerard. If she is tobe believed and she asserts it herself, the deed P 7 was given toprevent Andriesz selling the property transferred under the deedP 7, if the sale of the Kayman’s gate property on which he hada mortgage was insufficient to pay the mortgage debt.
According to Priscilla the debt was Bs. 260, and the Kayman’sgate property only realized Bs. 160, and so the sale, if there was noconsideration, which she also alleges, would have deprivedAndriesz of his resort to the other property. Assuming herevidence to be true, this would have defrauded Andriesz, and so,acting on the principle I have taken as a guide and considering themaxim in pari delicto potior est conditio possidentis, would preventthose claiming under Francis from obtaining relief from theconsequences of what Priscilla avers was the fraud of Francis.
From this point of view the appellants’ case fails out of themouth of Priscilla, the first added defendant.
If, however, we assume that Andriesz was not actually de-frauded, but that the transaction was in an inchoate stage with amere intention to defraud Andriesz^ the appellants inay thenshow the truth of the transactions.®
We have here to consider whether the appellants have provedthere was no consideration for P 7.,
The only person who gives any evidence «that there was not isPriscilla, who says all she knows was derived from what herhusband Francis told her.
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1903. The deed P 7 itself alleges Rs. 1,000 as consideration, while theSeptember 8. notary who attested it says that the Rs. 30.80 which wereMiddleton, acknowledged as paid at its attestation were paid by him toJ. Francis's creditor in case No. 89,461, C. R., Colombo.
Priscilla says the Rs. 30.80 came from David Perera out of therents he had to pay Francis, and that it was not paid to her hus-band, but to the plaintiff in the C. R. case No. 39,461, and wasdevoted to the payment of Francis’s debt, so that it came fromDavid by her own admission.
At the time the deed was executed she admits that one of thehouses purporting to be sold by P 7 was under seizure in case-No. 39,461 on the 29th September, the very day on which the deedwas executed, and the sale was not carried out; so that DavidPerera may have paid the whole judgment debt as part of theconsideration for P 7.
David Perera, though only alleged to be a lessee, is said byPriscilla to have rebuilt the two St. John’s road houses when theywere burnt in 1882.
The St. Lucia’s street house which was included in P 7 wastaken from Priscilla forcibly, and she has done nothing to asserther alleged rights to it.
The evidence as to payment of rent to Francis himself is-extremely inconclusive.
I think it is highly probable enat there was some sort of benamitransaction between Francis and David Perera as the result ofwhich it may be possible that David did not pay the whole allegedconsideration for his purchase under P 7, but that there was noconsideration I think the appellants have distinctly failed to prove.Upon this ground, therefore, I think the appellants must fail.
As regards prescription, the next point relied upon by theappellants, it is clear there was no physical possession for ten yearsby Priscilla and Francis, her alleged predecessor in title.
As to the point raised by Counsel on both sides as to the wantof administration (1) to Sophia’s estate and (2) to Francis’s estate,both these persons died before 1889, when the Civil ProcedureCode was passed. I think therefore that we ought not to’ apply toeither case the rigours of section 547.
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« Even if, however, we give the appellants the benefit of Francisas a predecesspr in title, I am not satisfied on the evidence that aconstructive possession *for ten continuous years adverse to and'independent of David Perera, by receipt of rent, has been proved.
It is true there is a receipt for rent in 1885 signed by Francis,and there is evidence to show that rent was paid to Francis andDavid, and that David divided: the money with Francis, that
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Priscilla alleges she put one Gordiano in as her tenant for a time, 1903.also that Priscilla came to demand rent from one Cyril de Zilva, September 8.an employ^ of Akbar Brothers who was a tenant of the premises, Middleton,and that Akbar gave her money and receipts were hied. On the J-other hand, there is evidence from the said De Zilva that DavidPerera was applied to do the repairs by Akbar, and was presentwhen repairs were done, and that he also received rent between1887 and 1895, and that others were in possession who. paid norent to Priscilla.
So far as I can judge, all Priscilla has established is that after herhusband’s death she disputed with others their right to the housein question, not that he and she received rent continuously for tenyears adversely to and without interruption from David Pereraor his successors. This disputing is consistent perhaps with theview entertained by people leasing the property that there was abenami transaction between David and Francis, .and the possibility,as I have before suggested, that there have been moneys due fromDavid to Francis upon that matter.
We have been appealed to ad misericordiam, but people whoenter on these benami transactions should understand it is adangerous course; and as Hobhouse, J., said in Kaleenath Kur v.
Doyal Kristo Deb. 13 W. B. 87 (1887), “ they must not expect theassistance of the Courts to extricate them from the difficulties inwhich their own improbity has placed them. ”
I think this appeal should be dismissed with costs.
Wendt, J.—I agree.