Joseph v. Commissioner of Stamps.„
1941Present: Moseley S.P.J. and Keunetnan J.
JOSEPH v. COMMISSIONER OF STAMPS.
Conveyance of Insurance policy—Transfer in contemplation of marriage—Conveyance not a gift—Stamp Ordinance (Cap. 189), Schedule A., Parti.,items 54 and 23 (2).
A transfer by a person to his prospective bride of a policy of insurancein consideration of the intended marriage is liable to duty as a conveyanceunder item 54 of Part I.. Schedule A, to the Stamp Ordinance read withitem 23 (2) of the same schedule.
PPEAL from an order of the Commissioner of Stamps.
31. M. I. Kariapper, for appellant.—It is submitted that the instrumentin question should be stamped under item 54 as dutiable under 23 (2)
' 22 X. L. D. 243.
151. S. B 17628 <5;52)
Joseph v. Commissioner of Stamps.
of Part I. of Schedule A of the Ordinance. The transaction embodied inthis instrument is not a gift or donation, which is dutiable under item 32 (2),but it is a conveyance of a policy for some valuable consideration. Theword “ consideratipn " must be given its meaning in English law,Wataraka Investment Co. v. ■ Commissioner of Stampswhich in thesense of the law may consist in some right, interest, profit or benefitaccruing to one party or some forbearance, detriment, loss or responsi-bility given, suffered or undertaken by the other (Currie v. Missa ).What is the consideration for this instrument ? It is the contemplatedmarriage between the parties to the instrument and marriage in Englishlaw is a valuable consideration, 5 N. L. R. 230 ; 8 Simon 253 (Spackmanv. Timbrell). The words of item 54 are wide enough to include a considera-tion of this nature, viz., marriage, for the words used are " anyconsideration”, and further item 23 (2) under which item 54 is dutiablecontemplates consideration being of different kinds including one of anon-pecuniary one. Marriage being good and valuable consideration ischargeable under item 54.
The existence of a consideration for the instrument, altogether takes itout of the category of gifts or donations ; which are dutiable under item 55as in 32 (2). The word gift is not defined in the Ordinance and one maylook at Text books for its definition. See definition of “ Gift” Forms andPrecedents (Encyclopaedia), Vol. 6, pages 120 and 121. Gift is a gratuitoustransfer.
H. H. Basnayake, C.C., for respondent.—The instrument before theCourt is liable to stamp duty under item 55 of Schedule A, Part I, of theStamp Ordinance. It is a gift although it recites that there is consider-ation. The principle that should guide one in deciding the proper itemunder which to stamp this instrument is to be found in the cases inIn re Veeravagu*; In re Gunasekera*; In re Coomarasamy *; andespecially in de Silva v. Commissioner of Stamps The true test forstamping deeds of this nature is laid by Macdonell C.J. in de Silva v.Commissioner of Stamps (supra). It may be taken as settled by thedecision of this Court (In re Veeravagu) that a dowry deed, even thoughit is executed in pursuance of marriage and in consideration of marriage,is, in fact, in substance a gift by the ,parent or parents to the daughter.The effect of this ruling interpreted most favourably for the appellant inthis case is that a deed such as the present, even though it may be in theeye of the general law a conveyance for value, is none the less under theprovisions of the Stamp Ordinance a gift, and therefore to be stampedunder Article 30 of the Schedule.
M.M. I. Kariapper, in reply.—There is no case applicable to the factsof the present case. All the decided cases are distinguishable and inappli-cable. They are concerned with deeds of gifts from parents to theirchildren on a marriage. Even the case of Re Goonesekere needsreconsideration.
Cur. adv. vulc.
1 34 N. L. R. at 272.■ L. R. 10 Exch. 162.» 23 N. L. R. 67.
24 N. L. R. 351.5 27 N. L. R. 62.
36 N. L. R. 396.
MOSELEY S.P.J.—Joseph v. Commissioner of Stamps.
February 5, 1941. Moseley S.P.J.—
A client of .the appellant on the eve of his marriage executed in favourof his prospective bride a deed whereby he transferred all his right, titleand interest in a certain policy of life assurance of the present surrendervalue of Rs. 2,432. The consideration for the transfer is expressed inthe document to be the intended marriage. The appellant considered thedocument to be a transfer of a policy of insurance for consideration, andtherefore dutiable under item 54 of Part I., Schedule A to the StampOrdinance (Cap. 189), which provides that the duty on such a documentshall be the same as on a conveyance under item 23 (2) of the same partof the Schedule. He therefore affixed stamps to the value of Rs. 25,which, if his estimate of the nature of the document be accepted, wouldbe the proper duty.
The document, however, came to the notice of the Registrar of Lands,who found it to be a transfer of the policy by way of gift, within themeaning of item 55, and to be dutiable under item 32 (2) (a). Under thelast-mentioned item the proper duty would be Rs. 75.
The matter was then referred for adjudication, as provided by section 29of the Ordinance, to the Commissioner of Stamps who endorsed the viewheld by the Registrar of Lands. Against that adjudication the appellantnow appeals.
It cannot, I think, be disputed that a conveyance in consideration ofmarriage is for valuable consideration. In Fernando v. Fernando1Lawrie A.C.J. expressed the view that “ if a land be conveyed beforemarriage by a bridegroom to his bride or to marriage settlement trustees,or if the parents of the bride convey land to her and to the bridegroomor fo trustees in consideration of the marriage, then such conveyancewould be for valuable causes ”. In the same case Moncreiff J. referred tothe case of Spademan v. T.imbrell ’ in which it was held that, where aperson settled property upon his wife and children in consideration ofmarriage, the settlement was -for valuable consideration. This caseFernando v. Fernando (supra) does not purport to be an authority in respectof stamp duty. The question of the nature of such a document, as we havebefore us. has been considered in a number of cases brought to our noticeby Counsel for the respondent. In the case of In re the Application ofK. S. Veeravagu, Notary Public3 De Sampayo J. observed thata dowry, though it may be given in consideration of marriage, is,nevertheless a gift. He traced the history of the relevant legislation andcame to the conclusion that “ a dowry deed, which is after all a gift,though it may be a gift of a special kind, must be stamped under Article30” (now 32). In de'Silva v. Commissioner of Stamps', Macdonell C.J.after considering the last-mentioned authority summarized his views asfollows:—“ In effect granting to the full, if you wish, that this deed wasa conveyance for value, still by virtue of decisions which are bindingupon us, it is also a gift which has not been accepted and therefore, if theCrc-wn wishes to stamp it with the higher duty chargeable under Article
1 S N. L. R. 230.3 23 N. L. R. 67.
* $ Sim. 261.* 36 X. L. R. 393.
MOSELEY S.P.J.—Joseph v. Commissioner of Stamps.
30 (b) of the Schedule, it is entitled to do so The authority for theCrown’s privilege to select the higher rate of duty is Speyers v. Commis-sioner of Inland Revenue'.
None of the authorities to which I have so far referred, nor any of thedecisions reviewed therein, is in respect of a gift by a husband to a wife,either before or after marriage. All are in connection with deeds ofdowry as I think they are understood in this country and perhaps inmost countries. As Hutchinson C.J. observed in Jayesekere v. Waniga-ratna et al.the dowry is almost always the consideration or part of theconsideration for the man taking the woman as his wife. The onlyauthority which has come to our notice in connection with a deed executedby a husband in favour of his wife is In re the Application of Goonesekera,Notary Public This was a case where a Muhammadan husband, afterthe marriage had been consummated, executed a deed in favour ofhis wife, in pursuance of an obligation which, it was contended,the Muhammadan law imposes upon a husband. Each of thelearned Judges who decided the appeal relied upon In re the Applicationof K. S: Veeravagu, Notary Public (supra). Schneider J. for reasonswhich I may say, with the greatest respect, are not clear to me, drew nodistinction between the nature of the instrument which the Court hadbefore it and that which was the subject matter in Veeravagu’s case.Porter J. contended himself with accepting the ruling in the latter case.The Court held that the document should be stamped under item 30 (b)(now 32).
It does not seem to me that there is any authority applicable to the casebefore us. As I have already observed the authorities, with one excep-tion, are cases in which a deed of dowry, executed by the parents of thebride in accordance with time-honoured custom, was the subject. Theexceptional case was decided upon the footing that the transaction wasone required by law. Neither factor appears in the present case.
In the Encyclopaedia of the Laws of England with Forms and Prece-dents (2nd ed.) at page 371 the following passage occurs : —
“ T&e distinguishing feature of a gift is that consideration is not anelement in it. The donor gets nothing for the property he conveys ortransfers”. In Halsbury’s Laws of England (1st ed.), Vol. XV. at page399 a gift' inter vivos ’ is defined as the transfer of any property from oneperson to another gratuitously, and at the same page, note (b) the learnedcommentator quotes, from 2 Bl. Com. 440, the observation that “ giftsare always gratuitous, grants are upon some consideration or equivalent.
Accepting the principle that marriage is a valuable consideration Iam unable to comprehend that a transaction of the nature of that whichwe are considering can be regarded as a gift. In my view the documentin question was properly stamped by the appellant under item 23 (2)of the Schedule. I would therefore, allow the appeal with costs.
Keuneman J.—I agree.
»(1908) A. C. 92.
3 12 .V. L. R. 304.
3 24 N. L. R. 3S1.
JOSEPH v. COMMISSIONER OF STAMPS