GRATIAEN J.—Samarasekera v. Munasinghe
1954Present: Gratiaen J. and Fernando A.J.‘HARRIET SAMARASEKERA, Appellant, and T.AKSTTAMTMUNAS IN GHE et al., Respondents
S. C. 28 (Inty.)—D. C. Colombo, 5,518/P
Servitude—J us superficiarium—Acquisition by 'prescription—Compensation—Basis■ of assessment—Partition sale.
o.. Where A. puts up a building at his own expense on the land of B. with B.’sconsent and approval, and exclusively enjoys the use of it as a superficiary for aperiod of ten years without interference by the soil owner B., he acquires,by prescription, the servitude known as the jus superficiarium. This rightwhich a person, has to a building standing on another’s ground is acquired andlost like immovable property. It can be alienated by notarial conveyance ortransmitted to the heirs of the superficiary on his death.
The soil owner who takes over the building from the superficiary must, in theabsence of an agreement to the contrary, pay him its “ present value ” (and notmerely its original cost if that be less). The same basis of assessment shouldbe adopted where the servitude is extinguished, by consent of parties, at apartition sale.
./^lPPEALi from a judgment of the District Court, Colombo.
H. V. Perera, Q.O., with D. L. Edusuriya and D. A. Jayasuriya, forthe 2nd defendant appellant.
N. E. Weerasooria, Q.G., with Sir Ukwatte Jayasundera, Q.C., and
T. Samarawickreme, for the plaintiff respondent.
GuSx. adv. wit.
June 7, 1954. Gbatiaen J.—
This appeal calls for a decision as to the precise nature of the legalrights enjoyed by certain parties in respect of a building (described forconvenience as the “ Victoria Petrol Service Station ”)c standing on aland in Peliyagoda.
The plaintiff instituted this action under the Partition Ordinancefor a sale of the land together with all the buildings standing on it.Admittedly, the land had at one stage belonged to Don Thomas who byP3 dated 21st September, 1940, gifted it to his two daughters (the plaintiffand the 1st defendant) in equal shares. Certain buildings (other than theVictoria Petrol Service Station) went with the soil shares, and there is nodispute as to them.
The circumstances in which the Victoria Petrol Service °5tation cameinto existence in or before the year 1928 are not in dispute either. Ithad been "built by Don Thomas’ son Don Chandradasa at his own expenseat a time whep. the father was the exclusive owner of the land. An almostcontemporaneous notarial lease 2D1 (which both Don Thomas and DonChandradasa signed) was executed in favour of the" Asiatic PetroleumCo.j Xitd., and it recites that Don Chandradasa had “ with Don Thomas,
GRATIAEN J.—Samarasekera v. Munasinghe
consent and approval ” incurred this expenditure “ for the purpose ofcarrying on the said premises the business of storing and selling ShellMotor spffit, motor oil and other accessories ”. A later notarial lease(P4 of 1934) in favour of the Shell Co. of Ceylon Ltd. (the successors ofthe former lessee) establishes that Don Chandradasa in fact carried onthe business as previously arranged in his own right. It was he (and notDon Thomas) who received the stipulated lease-rent under P4.
Don Chandradasa died on 29th June, 1939, leaving as his intestate heirshis widow (the appellant), his father Don Thomas, and three sisters (theplair tiff, the 1st defendant and the 3rd defendant). A subsequent deedof gift P3 of 1940 executed by Don Thomas is instructive as to how themembers of the fa mily at that time understood the legal rights which, hadpassed to them in respect of the Petrol Service Station upon Don Chandra-dasa’s death : Don Thomas, while donating the soil rights and the otherbuildings to two of his daughters (the plaintiff and the 1st defendant)on the footing that he enjoyed absolute dominium over them, only con-veyed to them his “ undivided J share of Victoria Petrol Service Stationbuilding ”. In other words, Don Thomas recognised that the rights■which he now enjoyed m respect of this superstructure were rights (shortof absolute dominium) which had been transmitted to him in 1939 asone of his son’s intestate heirs. Similarly, in 1946, the appellant, theplaintiff and the 1st and 3rd defendants jointly executed a further notariallease of the Petrol Service Station in favour of the Shell Company—thereby indicating that the rights in respect of this building had cometo them by intestacy (and, as far as Thomas’ inherited rights wereconcerned, by virtue of his subsequent deed of gift P3).
The same position is also recognised in the plaint in the present action.The plaintiff claimed in paragraph 10 that she and her sister the 1stdefendant were each entitled (under P3) to an undivided £ share of theland and the buildings other than the Petrol Service Station, whereasthe latter superstructure, instead of passing with the soil rights in theordinary way, “ belonged ” to the parties in the following shares : ■„•
to the plaintiff and the 1st defendant in respect of a 6/24 share
each (i.e., partly as Don Chandradasa’s intestate heirs and partly
under P3) ;
to the 3rd defendant in respect of an undivided 1/12 share (by
to the appellant, as Don Chandradasa’s widow, in respect pf an
undivided 1/2 share (by intestacy).■ <-=
The plaintiff asked for a sale of the land and buildings (including the PetrolService Station) under the Partition Ordinance, but subject to a directionthat the Commissioner should first make a “ just appraisement of the valueof the superstructure Victoria Petrol Service Station built by the saidDon Chandradasa The clear intention was that if. either of the co-owners of the land (i.e., the plaintiff or the 1st defendant) should exerciseher right of pre-emption under the Ordinance, she should be given creditfor her share of the value of this particular building ; and that, out of
GRATTAEU J.—Samaraaekera v. Munasinghe
the balance proceeds of sale, each of the other parties should in turn beentitled to draw her appropriate share of its " appraised value ”
The appellant filed answer agreeing to judgment in the form suggested,and, after some formal evidence had been led, this proposal was adoptedin the decree for sale. The decree itself declares that “ the parties areentitled to compensation for the improvements made by Don Chandra-dasa ”, but gives no special directions as to the basis on which suchcompensation should be assessed. Up to this stage, it seems to havebeen conceded that the true basis of appraisement was the value (andnot the original cost) of the buildings.
At the judicial sale which followed, the 1st defendant purchased theentire property for R-s. 81,000. A dispute then arose for the first timeas to the basis of assessment that should be adopted for the purpose ofsetting apart a portion of the purchase price for distribution betweenthe parties as “ compensation ” in respect of the Victoria Petrol ServiceStation.
According to the appellant’s contention, this superstructure should beassessed at Rs. 32,400 (i.e., its agreed value at the date of the sale); theplaintiff submitted on the other hand that it should be' askesse'd only atRs. 8,400 (i.e., the original cost of making the improvement in 1928).The learned judge who dealt with this outstanding dispute adopted thelatter basis of assessment. (To some extent he was, I think, handicappedby the fact that he was not the judge who had tried the action up to thestage when a decree for sale was ordered.)
It was argued on behalf of the appellant that the right which DonChandradasa enjoyed in respect of the building, and which had beentransmitted on his death to his intestate heirs, was a right of servitudeknown as jus superficiarium. The learned judge, however, took theview that “ his position had been simply that of a bona fide improverwho ean only claim the actual cost of his improvements or their presentvalue, whichever is less ”.
The later basis of assessment certainly conforms 'c<$ the correctprinciple for awarding compensation to a man who improves land belong-ing to someone else under the bona fide belief that he is its true owner ;and also in certain analogous cases : for example, where the true ownerstands by and acquiesces in the improvement of his land by a trespasser,or where a co-owner who has improved the common land must be compen-sated by another co-owner who, in an ultimate partition, is allotted theportion which includes the improvement. But the circumstances inwhich Don Chandradasa erected the Petrol Service Station cannot beequated to any of these situations, nor is it suggested that he was a mere“ lessee ” who had improved the property with his lessor’s consent.The basis on which he (or after him, his heirs) should be compensatedupon the extinguishment of the right to enjoy the building must thereforebe ascertained by reference to some other principle of our common law.
The servitude of jus superficiarium is of ancient origin, and is well-recognised by the Roman Dutch law—vide generally on this topic, Lee’s
GRATIAEN J.—Samarasekera v. Munasinghe
Elements of Roman Law (2nd Ed.) p. 170, para 243. In Ahampdo Natchiav. Muham&do Natchia1 Layard C.J., with whom Wendt J. agreed, said,“ The jus superficiarium is the right which a person has to a buildingstanding on another’s ground. It cannot be termed full ownership,for no one can be legally full owner of a building who has not the ownershipof the soil. It is the right to build on the soil and to hold and use thebuilding so erected, until such time as the owner of the soil tenders the valueof the building, if the amount to be paid has previously not been agreed upon.The right is acquired and lost like immovable property, and is evenpresumed to be granted when the owner of the ground permits anotherto build thereon. The right can be alienated and consequently there can beno doubt of its passing to the heirs of the original owner of the right ”.
Ahamado Natchia’s case (supra) was considered (after a re-trial) in asecond appeal by liascelles C. J. and Middleton J. in (1906) 9 N.L.R. 331.They observed that “ an agreement between the landowner and the personwho acquires the right ” is the foundation of the jus superficiarium, butthe Court did not finally decide whether, in Ceylon, the provisions ofsection 2 of the Prevention of Frauds Ordinance precludes us fromrecognising an .jmplied^ or non-notarial grant which is “ inferred fromthe fact tkat 2he owner permits another to build on the land Similardoubts were later expressed, but not resolved, by Lascelles C.J., sittingalone, in do Silva v. Siyadoris 2.
I conclude from these authorities that the jus superficiarium is aservitude which can without doubt be created in Ceylon by notarialgrant; similarly, once acquired, it can be alienated by notarialconveyance or transmitted to the heirs of the superficiary on his death ;clearly, it can also be acquired by prescription where a person who, inappropriate circumstances, has erected a building on another’s land andhas without Interference by the soil-owner exclusively enjoyed the useand enjoyment of it as a superficiary for the requisite period of ten years.(In such a case he prescribes to the servitude, not to the soil-rights.)The only outstanding problem is whether the servitude can also becreated under_a non-notarial agreement between the builder and thesoil-owner. ]?Ir. H. V. Perera has submitted for our consideration theargument that the Prevention of Frauds Ordinance has no application toan informal agreement whereby a soil-owner merely permits someone elseto build on his land, in which case it is in truth the implementation of theagreement (but not the agreement itself) which confers the jus super -Jiciarium on the builder by Operation'of law. For the purposes of thepresent appeal, it is not necessary to decide whether there is some flawin this attractive argument.
Upon the facts admitted in the pleadings and established by theevidence led f>t the trial, I am satisfied that Don Chandradasa was from-the very outset recognised by his father as enjoying, in respect of theVictoria Petrol Service Station, certain exclusive rights which wereequivalent to those of a superficiary. Their foundation was no doubtan informal agreement between father and son, but they* had becomeperfected by prescriptive user before Don Chandradasa died in 1939'—
2 11905) 8 N. L. R. 330.2 (1911) 14 N. L. R. 268’.
Simeon Silva v. Sivasupramaniam A.mbalam
so that, although the building acceded to the soil, Don Thomas’ rightsof full ownership were subject to the servitude enjoyed by his son. Thatservitude has since passed to the parties in the proportions Specified inthe decree. It has now been extinguished by virtue of the sale under thePartition Ordinance—and the purchaser has virtually acquired (1) thesoil-rights and the bare ownership (if I may use that term) of the buildingwhich belonged to the plaintiff and the 1st defendant in succession toDon Thomas, and (2) the exclusive right “ to hold and use the building ”which belonged to these parties who enjoyed the jus superficiarium insuccession to Don Chandradasa. The decree might well have directeda sale of the property subject to the servitude. But, as the direction wasthat, in accordance with the intention of the parties, the servitude shouldbe extinguished by the sale, it seems to me that the superficiaries wereclearly entitled to receive as compensation the “ present value ” of thebuilding which constitutes an integral part of the purchase price. InAhamado Natchia’s case (supra) Bayard C.J. explained that a soil-ownerwho takes over the building from the superficiary must, in the absence^of an agreement to the contrary, pay him its value (and not merely itsoriginal cost if that be less). I see no reason therefore why a reducedfigure should be awarded as compensation in a cUse whffl-et the*servitude-is extinguished, by consent of parties, at a partition sale. Indeed, Mr.Weerasooria’s argument seemed to concede that if Don Chandradasa’s-rights were in truth those of a superficiary, the appellant’s arguments-must prevail.
I would set aside the order under appeal and direct that, out of the.purchase price, the appellant, the plaintiff and the 3rd defendant should-each receive her appropriate share of Rs. 32,400 and not of Rs. 8,400.only.The appellant is entitled to the costs of this appeal and of the inquiry-in the Court below.
Fernando A.J.—I agree.
Order set aside-