139-NLR-NLR-V-49-FRANCINA-et-al.-Appellants-and-GUNAWARDENE-Respondent.pdf
J AYETILEJCE S.P.J.—Francina v. Gunawardene.
517
1948Present: Jayatileke, S.P.J. and Windham J.
FRANCINA et al., Appellants, and GUNAWARDENE, Respondent.
S. C. 439—D.C. Matara, 17,296.
Estate Duty—Property gifted subject to life interest—Death of donor—Application byadministrator to sell the property—Not under his control—Ordinance 8 of 1919,section 19.
One J gifted a certain land subject to his life interest. On his death hisadministrator applied to Court for permission to sell this land for the purposeof getting funds to pay the testamentary expenses and stamp duty. Theapplication was allowed and the land was sold by public auction and boughtby the plaintiff.
Held, that title to the land was in the donees and that the Court had nojurisdiction to order the sale of the land. No title therefore passed to thethe plaintiff at the sale.
Held, further, that the land did not come under the control of the adminis-trator within the meaning of section 19 (1) of the Estate Duty Ordinance 8 of1919 and that duty was not payable by him. The proper course for the recoveryof estate duty would have been for the Commissioner of Stamps to take stepsunder section 32.
^ PPEAL from a judgment of the District Judge, Matara.
E. B. Wikramanayake, for the defendants, appellants.
N. E. Weerasooriya, K.C., with W. D. Gunasekeru, for the plaintiff,respondent.
Cur. adv. wit.
August 5, 1948. Jayetileke S.P.J.—
This is an action for a declaration of title to the land described in theschedule to the plaint. It is common ground that the land belonged toone Jayasinghe who died on August 8, 1929, leaving an estate overRs. 2,500 in value, which was administered in testamentary action
518
JAYETIL.EJCE S.P.J.—Francina v. Gunauardtne
No. 3,554 of the District Court of Matara. The plaintiff alleged that,in the said action, the said land was sold at the instance of the officialadministrator, by public auction, with the authority of the Court, for thepurpose of getting funds to pay the testamentary expenses and stampduty, and, at such sale, he purchased it for Rs. 450 and obtained aconveyance in his favour bearing No. 450 dated August 23, 1944, attestedby E. S. Fonseka, Notary Public (P6). The {defendants alleged thatJayasinghe gifted the said land to the 6th defendant, subject to his lifeinterest, by deed No. 7,621 dated August 4, 1929, attested by N. J. S.Gunawardena, Notary Public (6D1), and that the administrator ofJayasinghe’s estate had no power to sell it. They alleged further thatthe 6th defendant transferred it by deed No. 965 dated June 20, 1942,attested by E. Dissanayake, Notary Public (6D2), to the 2nd, 3rd, 4thand 5th defendants and that the latter had a good and valid title to it.
The main question for the decision of the Court was whether the orderfor the sale of the property in the testamentary action was made withoutjurisdiction. This question had to be decided under the repealed EstateDuty Ordinance, No. 8 of 1919 (see S79 of the Estate Duty Ordinance,Chapter 187). The defendants did not contest that the property passedon the death of the deceased for the purpose of estate duty, but theysaid that it passed to the 6th defendant and not to the administrator.S18 of the Ordinance draws a distinction between property passing onthe death of a person to his executor, and property passing to any otherperson. The only interest the deceased had in the property in questionwas a life interest which ceased on his death, and there was, therefore,nothing which could pass to the administrator. The proceedings showthat, on the death of the deceased, the 6th defendant entered into possessionof the land, and remained in possession till he transferred it in 1942 by6D2.S19 (1) provides that the executor shall pay the estate duty on
all property coining to him, or being under his control, and that he maypay the estate duty in respect of any property not coming to him, orbeing under his control, if the persons accountable for the d-ity in respectthereof request him to make such payment. S19 (2) provides that theestate duty, so far as not paid by the executor, shall be paid by theperson to whom any property passes for any beneficial interest inpossession, and also to the extent of any property actually received byhim. It is clear from these provisions that the estate duty in respectof the property in question was payable by the 6th defendant. But thejournal entries in the testamentary action show that the greater part,if not the whole of it, was, in fact, paid by the administrator. It wasnot suggested that such payment was made at the request of the 6thdefendant. The administrator seems to have made the payment becausehe thought that 6D1 was not the act and deed of the deceased. He tookno steps to have the deed set aside, or to have the 6th defendant ejectedfrom the land. The question whether 6D1 was the act and deed of the -deceased was raised by the plaintiff at the inquiry in the Court below,and decided by the District Judge against him. The correctness of thatfinding 'was not questioned at the argument before us. On these factsit is not possible to say that the said land came under the “ control ” ofthe administrator within the meaning of S19 (1). The proper coursefor the recovery of the estate duty in respect of the land in question
XAGALINGAM J.—Ferdinandtts v. Manidpo iCouncil, Colombo519
would have been for the Commissioner of Stamps to make an applicationto the District Court under S32 for a citation on the 6th defendant toshow cause why execution should notissue against him. No such applica-tion was' made by the Commissioner. I am of opinion that the DistrictJudge had no jurisdiction to order the said land to be sold and that P6did not convey any title to the plaintiff. The facts of this ease are some-what similar to those in Samaras inghe v. Secretary, District Court, Malar a1.Tn that case one Joonoos gifted a tea estate belonging to him to fourof his children a few months before his death. The administrator of hisestate applied to the Court and obtained writ to sell the share of the2nd respondent, who was one of the donees, to recover her share of theestate duty. At the sale the 4th respondent purchased the said share.The appellant, who had a mortgage of the 2nd respondent’s share,contested the validity of the sale on the ground that the Court had nojurisdiction to order the sale. It was held that the order for sale wasunlawful and therefore without jurisdiction. I would set aside thejudgment appealed against and dismiss the plaintiff’s action with costsin both Courts.
Windham J.—I agree.
Appeal allowed.