K. NADESAN, Appellant, and V. RAMASAMY, Respondent

009-NLR-NLR-V-63-K.-NADESAN-Appellant-and-V.-RAMASAMY-Respondent.pdf


* Nodes an v. Ramasamy
49
[In the Privy Council]
Present: Viscount SImonds, Lord Radcliffe, Lord Hodson, LordGuest, Mr. L. M. D. do SilvaK.NADESAN, Appellant, and V. RAMASAMY, RespondentPrivy Council Appeal No. 30 of 1960S. C. 571—D. C. Point Pedro,, 4187
Partition action—Corpus subject to fidei commissum—Effect of partition decree onthe rights of a subsequent fidei commissarius—Claim by a fidei commissariusagainst his fiduciarius or his successors in title—Conclusive character of apartition decree—Partition Ordinance, No. 10 of 1863 (Cap. 56), ss. 2, 9.
Where property burdened with a fidei commissum under a deed of gift hasbeen partitioned under the Partition Ordinance No. 10 of 1863, such partitionhas not the effect of destroying the fidei commissum which thereafter attachesto the land allotted in severalty to the fiduciarius or his successor in title, eventhough no mention has heen made' of his capacity in the partition decree.Section 9 of the Ordinance has no bearing upon the rights of fidei commissariiwho have no present right or interest in the land which is being partitioned.They are not owners or co-owners to whom Section 2 can apply.
Appeal from a judgment of the Supreme Court delivered on the2nd November 1956.^
A deed of donation relating to an undivided fourth share of a certainland created a fidei commissum in favour of the descendants of the doneeand at the same time empowered the donee, if necessary, to dispose ofthe land by way of donation or dowry to his descendants. The deedwas executed on the 19th March 1928. On the 6th September 1934 thefiduciarius, in purported exercise of his power, made an irrevocable dona-tion of the whole property to a daughter. After a series of transactions thefiduciarius became the purchaser of it on the 16th November 1936. Hesubsequently sold it on the 11th October 1941 to one Vythilingam. Thelatter instituted proceedings for partition on the 25th June 1942 andin due course a partition decree was entered on the 13th June 1944 underwhich Lot 3 was allotted in severalty to. Vythilingam. No mention wasmade in the decree of the fidei commissum created by the deed of 1928.On the'23rd August 1945 Vythilingam sold Lot 3 to the present respondent.
The plaintiff-appellant, who had been bom in' 1926, was one of theten children of the fiduciarius living at his death in January 1948. As afidei commissarius he instituted the present action in January 1952claiming from the respondent a declaration of title to an undivided3—lx in
I. N. R 18070—2,033 (7/61)
2-
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VISCOUNT SIMOXDS—IKadesan v. Ramasamy
tenth share of Lot 3. He proved that the fiduciarius had acted fraudu-lently with a view to his own advantage when he made the donationto his daughter on the Gth September 1934. He proved also that therespondent was not a purchaser for value without notice. The respondentalleged, however, that the effect of Section 9 of the Partition Ordinance,1863, which was then in force, was to confer on him, by the partitiondecree of the 13th June 1944, an absolute and indefeasible title whetheror not the fiduciary or any purchaser from him had been guilty of fraud.
E. F. N. Gratiaen, Q.C., with Walter Jayaivardena, for the plaintiff-appellant.
Dingle Foot, Q.C., with R. K. Handoo and Dick Taverne, for thedefendant-respondent.
Cur. adv. vult.
May 8, 1961. [Delivered by Viscount Simonds]—
In this appeal from a judgment and decree of the Supreme Court of theIsland of Ceylon the appellant seeks to have restored a judgment in hisfavour given by the District Court of Point Pedro on the 2nd April, 1954,
The appellant as plaintiff claimed a declaration of title to an undividedtenth share of certain land which had itself been allotted out of a largerextent of land in the circumstances that will be stated to the predecessorin title of the respondent. He claimed also ejectment of the respondentand damages.
The appellant’s father, Nagamattu Kanagasunderarn, was one of foursons of Arumugam Nagamattu who, by deed of the 19th March, 1928,donated to him subject to a fidei commissum in favour of his descendantsone fourth share of certain land known as Sadai-jakadu in the district ofJaffna. The fidei commissium was in these terms :—
“ I declare that the donee should not encumber the said lands by wayof documents such as any transfer, otty, mortgage, donation and dowryetc. or encumber the same in any other way or alienate the same butpossess the same during his lifetime and die leaving behind the same todevolve on his descendants but if found necessary he may dispose thesame by way of donation or dowry to his descendants and will have noright to make these properties or property or any part of the propertiesor property bound for any kind of debts and would not be liable evenfor the penalties of Courts.”
The appellant was one of the ten children of his father living at his deathin January 1948. The father will for brevity’s sake be called “ thefiduciary ”.
On the 6th September, 1934, the fiduciary in purported exercise of thepower contained in the recited deed made an irrevocable donation of thesame land to his daughter Vadivelambikai. The donation was expressed
VTSCOTJNT SIMONDS—Nadeaan v. Ramasamy
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to be made in consideration of the natural love and affection which hebore to her and for diverse other causes and considerations thereuntomoving him. The validity of this gift is of primary importance. Thediscussion of it will be deferred until the rest of the story has been brieflytold.
On the same 6th September, 1934, Vadivclambikai and her husbandin consideration of the sum of Rs. 5,000 conveyed the same land to hergrandfather Ponniah Mailerumperumah absolute^. It appears from thenote of the attesting notary that Rs. 2,000 only were paid to the vendorsin his presence.
On the same day Ponniah Mailerumperumah mortgaged the sameland to one Parupathipillai for Rs. 2,000. Of this sum Rs. 500 onlywere given to Vadivelambikai, the remainder being appropriated by thefiduciary.
On the 16th November, 1936, Ponniah Mailerumperumah sold thesame land to the fiduciary. The deed stated the consideration to beRs. 10,000 paid by the fiduciary to him. The note of the attesting notarystated that out of the consideration Rs. 2,400 was paid in his presenceand the balance was acknowledged to have been received. The mortgagefor Rs. 2,000 was presumably discharged.
On the 7th December, 1936, the fiduciary and his wife mortgaged thesame land to Ponnampalan Vythilingam to secure Rs. 6,000 and interestthereon, and on the same day Ponniah Mailerumperumah renounced anyclaims he might have to the property.
On the 11th October, 1941, the fiduciary and his wife in considerationof the sum of Rs. 5,000 conveyed the same land to the said Vythilingam.He was already a mortgagee for Rs. 6,000 and interest but nothing issaid about this in the deed.
Vythilingam being thus apparently entitled to one fourth undividedshare of the lands donated by the deed of the 19th March, 1928, institutedproceedings for partition in the District Court of Jaffna on the 25th June,1942. The other parties to the suit were the three brothers of the fiduciaryto each of whom an equal one fourth share of the property had been given.In due course a decree was made by that Court under which certain landsknown as Lot 3 were allotted in severalty to Vythilingam. Lot 3 is thesubject of the present dispute. No mention was made in the decree ofthe fidei commissum created by the deed of 1928.
Vythilingam, having thus obtained Lot 3, purported by deed datedthe 23rd August, 1945, to sell it to Ramasamy the present respondentand defendant in the action. The consideration was expressed to beRs. 13,500.
The appellant who had been bom in 1926 commenced these proceedingsin January, 1952.
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VISCOUNT SIMONDS—Kadesan v. Ramasamy
The questions that arise are (1) whether the fiduciary was empoweredby the deed of 1928 to donate the whole of the land subject to the fideicommiasum to a single descendant: their Lordships will deal very shortlywith this question ; (2) whether upon the assumption that he was soempowered he exercised the power fraudulently, that is, not with anentire and single view to the real purpose and object of the powerbut for the purpose of carrying into effect a bye or sinister object (seePortland v. Topharn l) ; (3) whether, even if the exercise of the powerwas fraudulent, the respondent could either upon the ground that hewas a purchaser for value without notice or by virtue of the PartitionOrdinance maintain his title to the land against the appellant as fideicommissarius.
Upon the first question, viz. whether upon the true construction of therelevant clause in the deed the power vested in the fiduciary by the words“ but if necessary he may dispose the same by way of donation or dowryto his descendants ” was validly exercised by a donation of the whole ofthe property to one child and the consequent disinheritance of his othernine children then living, the trial Judge upheld the plea of the appellantbut for some reason that was not explained this plea was abandonedbefore the Supreme Court. Their Lordships thought fit, as the questionwas purely one of law, to allow it to be raised, but, having done so, donot propose to decide it. It is unnecessary to do so in view of theirother conclusions in the case and they think it proper not to make anyobservations which might be prejudicial if and when a similar questionarises upon other deeds with clauses bearing a marked resemblance tothis.
Upon the second question, viz. whether the power was fraudulentlyexercised, the learned trial Judge, having seen and heard the witnesses,came to a clear conclusion in the appellant’s favour. The SupremeCourt was of opinion that he was wrong, holding that the evidence fellshort of the clear proof that is required to establish a fraudulent exerciseof power especially where the person who has exercised it is dead. TheirLordships have carefully considered the several transactions in whichthe fiduciary was concerned and the oral evidence and cannot concurin the views of the Supreme Court. There is no reason to suppose thatthe learned trial Judge was unaware of the jealousy with which evidencedirected against a dead man is to be regarded or of the suspicion thatcould be justly entertained of the testimony of the appellant’s mother.There is on the other hand, as their Lordships think with great respectto the Supreme Court, some ground for doubting whether that Courtdirected its mind to the precisely relevant point. For its conclusionupon the evidence was that “ the evidence in the case fails to establishthat Kanagasunderam (the fiduciary) sold the land to Vythilingam inorder to defraud his children by Sivapakiam ”. But the alleged fraudbegan at an earlier stage, when the fiduciary donated the whole propertyto his daughter.It may well be that even then the subsequent transaction
1 JIB. oJL. 32.
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wag contemplated, but the initial fraud lay in the deed of the 6th September,1934. As to this deed, their Lordships regarding the oral and documentaryevidence with all proper jealousy and suspicion entertain no doubt thatthe fiduciary exercised his power not in order to benefit his daughterVadivelambikai, one of the fidei commissarii, but with a view to his ownadvantage. There was some evidence that the daughter’s husband wasat one time unemployed and in poor circumstances, but it properly didnot, in face of the other evidence, satisfy the learned Judge that thedaughter and the daughter alone was the beneficiary of the transactions.She and her husband had gone to Malaya and were not called as witnesses.Her mother, the wife of the fiduciary, gave evidence which, if accepted,was conclusive. Their Lordships see no reason why it should not havebeen accepted. It was not contradicted and had the ring of truth.The trial Judge correctly concluded that the power reserved to thefiduciary was fraudulently exercised by him.
That however does not end the matter. It was urged on behalf of therespondent that, whether or not there was fraud in the exercise of thepower, he was a purchaser for value without notice of the fraud and histitle was accordingly unassailable. If the premiss was established, itwould be necessary for their Lordships to examine the consequent plea.But again the finding of fact of the trial Judge is conclusive. He wasamply justified by the evidence in finding that the deed of 1934 and thesucceeding deeds relied on by the respondent were “ executed fraudulentlyand collusively "with intent to defraud the plaintiff (appellant) as abeneficiary ” under the deed of 1928 and that the respondent was awareof the fidei commissum and had constructive notice of the fact that thefiduciary was planning a method of defeating it. His own conduct inregard to the lots allotted in the partition to the fiduciary’s brothersgave support, if support were needed, to this view.
Their Lordships, having come to the conclusion that the respondentwas not a purchaser for value without notice of the property in dispute,have finally to consider whether he was nevertheless protected from anyadverse claim by the Partition Decree of the 13th June, 1944. Healleged that the effect of Section 9 of the Partition Ordinance, 1863,which was then in force, was to confer on him an absolute and indefeasibletitle whether or not the fiduciary or any purchaser from him had beenguilty of fraud. Upon this part of the case their Lordships have notthe advantage of a judgment by the learned Judges of the SupremeCourt.
« Section 9 of the Ordinance is in the following terms :—
“ 9. The decree for partition or sale given as hereinbefore providedshall be good and conclusive against all persons whomsoever, whateverright or title they have or claim to have in the said property, althoughall persons concerned are not named in any of the said proceedings,nor the title of the owners nor of any of them truly set forth, and shall
2*J. N. R 1S070 (7/51)
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VISCOUNT SIMONDS—Nadesan v. Ratnasamy
be good and sufficient evidence of such partition and sale and of thetitles of the parties to such shares or interests as have been therebyawarded in severalty :
Provided that nothing herein contained shall affect the right of anyparty prejudiced by such partition or sale to recover damages fromthe parties by whose act, whether of commission or omission, suchdamages had accrued.”
It must first be said that there is a long current of authority in theCourts of Ceylon to the effect that property burdened with a fideicommissum may be partitioned under the Ordinance and that suchpartition has not the effect of destroying the fidei commissum whichthereafter attaches to the land allotted in severalty to the fiduciary.The substance of these propositions had already been laid down by thisBoard in Dona Maria Abeyesekere Hamini v. Daniel Tillekeralne 1. Atpage 285 Lord Watson said : “ Not one of these enactments (one of thembeing the Ordinance in question) professes to deal with or alter the lawof fidei commissum : and in their Lordships’ opinion they cannot beconstrued as having that effect
The first case in the Courts of Ceylon to which it is necessary to referis Babey Nona v. Silvai 2 *. There, the precise point being raised, Lascelles
C.J. said : ** In my opinion the balance of reason and authority is infavour of the view that property subject to fidei commissum may be thesubject of partition and I hold in the case under consideration, that theproperty in dispute, though subject to fidei commissum, was lawfullypartitioned. But the partition decree in no way extinguishes the rever-sionary interest of the fidei commissarius. It merely sets apart a specificportion of the common estate to which the rights of the fidei commissariusattach in severalty. By no reasonable construction of the Ordinancecan it be held that the effect of a partition decree is to enlarge the lifeinterest of the fiduciarius into absolute ownership ”. The learned ChiefJustice then quoted the passage already cited from the judgment deliveredby Lord Watson. In Weeresekera v. Car Una3 the same learned ChiefJustice assisted by De Sampayo (then A.J.) reaffirmed what had beensaid in Babey Nona v. Silva saying that he saw no reason to differ from it.In Dassanaika v. Tillekeralne 4 the matter was treated as settled law byWood Renton C.J. In Marikar v. Marikar6 the only question waswhether the rule well established in regard to fidei commissa prevailed alsoin regard to trusts but there are in the judgment of Bertram C.J. somepertinent observations about the interests which were dealt with inpartition proceedings. In Gooneratne v. Bishop of Colombo 6 (a usefulcase in which numerous previous authorities were examined) LyallGrant J. said : “ The net result of the cases seems to be that nopartition can affect the rights of a subsequent fidei commissarius except
i (JS97) A. C. 277 ; 2 N. L- R.313.*(1917) 4 Ceylon W. R. 334.
* (1906) 9 N. L. R. 251.6 (1920) 22 N. L. R. 137.
» (1912) 16 N. L. R. 1.• {1931) 32 N. L. R. 337.
VTSCOUNT SDIONDS—Nadesan v. Rama&amy
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to the extent of attaching his rights to a divided portion of the landinstead of to an undivided share and also perhaps to the extent ofsubstituting money for land, the latter only in exceptional circumstancesand under safeguards It was urged by counsel for the respondentthat this chain of authority was broken by Kusmawaihi v. Weerasinghe x.But this is not so. The learned Chief Justice Macdonell who decidedthat case was careful to cast no doubt on Babey Nona and the succeedingcases but (rightly or wrongly) distinguished the case before him, saying :“ The donor of the land charged by her with a fidei commissum underwhich she the donor was not a fiduciarius, thereafter enlarged by virtueof a partition decree the rights, dominial or usufructuary, remaining toher after her gift into the full and conclusive ownership that a partitiondecree title gives, which ownership she, not being a fiduciarius, couldtransmit unburdened by the fidei commissum to her successors in titleNo doubt is cast on the title of a fidei commissarius as against his fiduciaryor a person claiming through him. As has been already said, it isunnecessary to consider whether in the law of Ceylon the equitable doctrineof purchase for value without notice has any place. Observations willbe found in favour of the view that it has, but the contrary view hasalso been entertained, see e.g. Tillakaratna v. De Silva2. The onlyquestion which their Lordships are now considering is the effect of apartition decree under the Ordinance of 1863 which makes no mentionof a fidei commissum. Upon that question no doubt has been expressed.
It remains, so far as authority is concerned, to mention the case recentlyheard by this Board upon which reliance was placed by the respondent,Adamjee v. Sadeen3. That case proved upon examination to haveno bearing upon a case in which a fidei commissarius claimed againsthis fiduciarius or his successors in title. The long and careful judgmentdelivered by Lord Cohen does not mention, much less purport to overrule,the long line of authority to which reference has been made. It assertsin a different context the conclusive character of a partition decree andemphasises that Section 9 of the Ordinance may in some circumstanceseven bar the title of a person whose interest has been concealed by thefraudulent collusion of the parties to a partition suit.
Their Lordships have referred to the line of authority by which for50 years the Courts of Ceylon have held themselves bound and theywould be reluctant to disturb it even if they came to a different conclusionupon Section 9 of the Ordinance. But that is far from being the case.
It appears to them that this section has no bearing upon the rights offidei commissarii who have no present right or interest in the land whichis being partitioned. They are not owners or co-owners to whom Section 1c^jl apply : they may not even be in existence at the date of the partitionsuit. It is difficult to see what part they can play in such a suit. Itmight have been prudent to provide that in a partition decree, by whichland was allotted in severalty to one who appeared to be a fiduciarius,some mention should be made of his capacity. But this might well 1
1 (1932) 33 N. L. R. 265.a (1947) 49 N. L. R. 25.
3 (1957) A. C. 94; 53 N. L. R. 217.
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FaZil Abdul Caffoar v. The Commissioner of Income Tax
have created grave embarrassment. The absence of such a provisioncannot, as it appears to their Lordships, bring them within the scope ofSection 9. It is true enough that the words “ against all persons whom-soever, etc. ” are wide and general. But it is not a new doctrine thatwide and general words may be limited by the field in which they arefound.
Their Lordships accordingly reject this submission of the respondenthoth on reason and authority.
The appellant does not seek to disturb that part of the order of thetrial Judge which provided for payment by him to the respondent ofRs. 1,500 for improvements and for jus retentionis until the same be paid.
For the reasons herein stated their Lordships will humbly adviseHer Majesty that this appeal should be allowed, the judgment of theSupreme Court set aside and the decree and order of the Trial Judgerestored.
The respondent must pay the appellant’s costs here and below.
Appeal allowed.