097-NLR-NLR-V-70-K.-RAMANATHAN-Appellant-and-L.-H.-PERERA-and-2-others-Respondents.pdf
467
Ramanathan v. Per era
1962Present: T. S. Fernando, J., and Tambiab, J.
K.RAMANATHAN, Appellant, and L. H. PERERA and 2 others,
Respondents
G. 4559—D. C. Colombo, 760}ZL
Civil Procedure Code—Section 218 (k)—“ Contingent right ”—Trust—Interest of abeneficiary—Liability to be sold in execution of a money decree against him.
Where, in a trust created by will, the legal title to the property which is thesubject matter of the trust is vested in the trustees during the continuanoe of thetruBt and the beneficial interest is vested in the beneficiaries, but the enjoymentof the beneficial interest is postponed till the death of the last of the trustees,the interest of any of the beneficiaries is an assured and vested interest and isliable, during the life time of a trustee, to be seized and sold in satisfaction of adecree entered against him for payment of money. In such a case the interestof the beneficiary is not a merely contingent right within the meaning of section218 (it) of the Civil Procedure Code.
.A.PPEAL from a judgment of the District Court, Colombo.
H. V. Perera, Q.C., with M. S. M. Nazeem and M. T. M. Sivardeen,for the plaintiff-appellant.
Ranganathan, with 8. C. Crossette-Thambiah, for the defendante-reepondents.
Cur. adv. vult.
468
TAMBIAH, J.—Ramanathan v. Per era
January 16, 1962. Tambiah, J.—
The defendants in this case filed case No. 14,719/S in the District Courtof Colombo against one Rajendram and, having obtained decree, theyseized the land described in the schedule to the plaint. The presentplaintiff, who purports to be one of the trustees under a last will left by thegrandfather of the said Rajendram, made a claim before the DistrictCourt but his claim was dismissed by that court. The plaintiff thereuponfiled the present action under section 247 of the Civil Procedure Code inwhich he asked for a declaration that the property, which has been thesubject-matter of seizure, is not a seizable interest as it is exempted by theprovisions of section 218 (fc) of the Civil Procedure Code.
Section 218 (k) of the Civil Procedure Code (Cap. 101) of the RevisedLegislative Enactments (1956 Edn.) gives the right to the judgment-creditor to seize and sell or realise in money by the hands of the Fiscal“ all saleable property, movable or immovable, belonging to the judgmentdebtor, or over which or the profits of which the judgment debtor has adisposing power, which he may exercise for his own benefit, and whetherthe same be held by or in the name of the judgment debtor or by anotherperson in trust for him or on his behalf ”. The proviso to this sectionexempts certain classes of property from seizure or sale. One of theexempted classes of property is “ an expectancy of succession by survivor-ship or other merely contingent or possible right of interest ” (vide section218 (k) of the Civil Procedure Code). The learned District Judge has heldthat the property in question does not fall within the ambit of section218 (fc) of the Civil Procedure Code and, therefore, is liable for seizureor sale. The plaintiff has appealed from this order.
The question for determination is whether the interest, whichRajendram has in the property in question, is a contingent or a vestedright within the meaning of section 218 (k) of the Civil Procedure Code.The Indian Civil Procedure Code contains a provision similar to section218 and it is therefore relevant to consider the distinction drawn betweena contingent interest and a vested interest by their Lordships of the PrivyCouncil in construing the corresponding section of the Indian CivilProcedure Code. In Babui Rajeshwari Kuer v. Babui Kuhkhna Kuer andanother 1 a testator, who had no male issue, provided in his will that afterhis death, his wife should become proprietor having fife interest only ofall his properties. The will then proceeded as follows : “ (4) On the deathof my wife the whole of my estate being treated as 16 annas right,3 as. and odd out of it shall pass into the possession of the daughter-in-lawbut she shall not have the right to transfer the same, 12 annas share shallpass into the possession of the two daughters born of the womb of mydaughter who are still living in equal shares, i.e., each will get 6 annas shareand 1 anna share shall pass into the possession of the sister-in-law asabsolute proprietors having the right to alienate, etc. the property ”. Thewill also had other provisions which are not relevant to this case. The
1 (1943) A. I. R„ P. C. 121.
TAMBIAH, J.—Ramanathan v. Per era
469
-question arose as to whether the grand-daughters, to each of whom halfthe property had been left by will, had a contingent or a vested interestwithin the meaning of section 61 of the Indian Civil Procedure Code. Thecontention of the appellant that, on a proper construction of the will, theinterest of the grand-daughters was contingent on the survival of thewidow was based on the clause “ who was still living ”, It was arguedthat these words are equivalent to “ who shall be still living ” and there-fore, the grand-daughters only succeeded if they happened to survive thewife of the testator. Their Lordships of the Privy Council rejected thiscontention and held that the interest of the grand-daughters was a vestedone and not a contingent one. Clause (6) of the will provided that “ if forany reason God forbid, any portion of the said estate is not takenpossession of by my daughter’s daughters and the sister-in-law and theydo not get the opportunity of entering upon possession and occupationof it, the entire estate will remain in my daughter-in-law’s possessionwithout the right of transfer and on her death the entire estate shall betreated as my estate with the District Magistrate and Collector of Saran asits manager and trustee ”. Referring to this clause, their Lordshipsobserved that the most that can be said is that this clause is intended, incertain events, to divest the interest which before those events havealready become vested.
The term * contingent ’ right in section 218 (k) of the Civil Procedure■Code moans a right which is conditional as contrasted with a vested rightwhich is a certain or assured right. When the word ‘ vested ’ is used inthis sense, Austin (Jurisprudence vol. 2, lect. 53) points out that in realitya right of one class is not being distinguished from a right of another classbut that a right is being distinguished from a chance or possibility of a right,but it is convenient to use the well-known expressions vested right andconditional or contingent right (vide also Jewish Colonial Trust Ltd. v. EstNathan 1, per Watermeyer J. A.).
Our Courts have also considered the meaning of the terms “ contingent ”and “ vested ” in dealing with properties which are burdened with afideicommissum. In Mohammed Bhoy et al. v. Lebbe Maricar 2 it was heldthat the interests of a fideicommissarius cannot be sold in executionduring the lifetime of the fiduciarius as it is a contingent interest withinthe meaning of section 216 (&) of the Civil Procedure Code where such aninterest was croated by will and contained the condition that, on thedeath of the fiduciarius, the property should pass to the fideicommissarius.The interest of the fideicommissarius, in this case, was “ expectant on hissurviving his father ”. In Silva r. Silva 3 a deed of gift created afideicommissum in which the fideicommissary succeeded to the propertyafter the death of the fiduciary. It was held that the former acquired“ an assured and certain interest ” which was liable to be seized andsold under section 218 (A) of the Civil Procedure Code. Under theRoman-Dutch law, there is a distinction between a fideicommissum
1 (1940) A. D. 163 at 176.* (1912) 15 N. L. R. 466-
» (1927) 29 N. L. R. 373.
470
TAMBIAH, J.—Ramanathan v. Perera
-*
created by deed and a fideicommissum created by will. Where afideicommis8um is created by deed, the fideicommissary has an assuredinterest which he could alienate even if he happens to die before thefiduciary.
In Gunatilleke v. Fernando 1 Lord Phillimore, delivering the opinion ofthe Privy Council, equated contingent interest to “ spes”. He said(vide 22 N.L.R. at page 393): “ But as to the alienability of a contingentinterest, there appears to be a dearth of authority. None has beenbrought to their Lordships’ notice. No doubt the spes which such aremainder-man can alienate is a very shadowy one, for if he predeceasesthe fiduciary, his heirs take nothing, and therefore the alienee oouldtake nothing ”.
In the instant case, the question is whether, on a true construction ofLast Will No. 147, executed by Sathappa Chetty Kalimuttu Chetty,Rajendram, who is one of his grandsons, had a vested interest or merely acontingent interest. It was contended on behalf of the appellant thatRajendram’s interest only vested if he happened to survive the last of thetrustees. It was also contended that the trust operated during thesubsistence of the will and that Rajendram had no right to the propertyor to the income thereof, and consequently he had only a contingentinterest.
The counsel for the respondent, on the other hand, submitted thatRajendram had a vested interest but the beneficial enjoyment of his shareof the property was postponed till the last of the trustees died. He alsocontended that during the pendency of the trust, the trustees wereempowered to perform certain functions and duties which did notmilitate against the vesting of the rights of Rajendram.
Sathappa Kalimuttu Chettiar, after executing last will No. 147 of 20thAugust 1938, executed two other codicils. The terms of the codicils areirrelevant in determining the question at issue in the instant case. Thetestator, who executed this will, was possessed not only of this land butalso of several other properties and he had eight children by two marriages.By the first bed, he had Sellatchi, Vettivel, Muttukaruppan and PeriyaPonnatchi, and by the second bed, he had Sinna Ponnatchi, Thevagnana-sekeram, Ramanathan and Nagendra. Of these eight children, seven ofthem had married and had children of their own. Nagendra was a minorand was unmarried at the time Kalimuttu Chettiar wrote his last will.Rajendram, one of the judgment-debtors in tho case mentioned, was oneof three children of Kalimuttu’s son, Vettivel, by the first marriage.
The recital to the last will states that the testator is desirous of dividinghis property among the grandchildren in tho proportions : J share to thechildren of Muttukaruppan, Periya Ponnatchi, Thevagnanasckoram andRamanathan respectively and £ share to his son, Nagendra. The last
i (1921) 22 N. L. R. 385 at 393.
T AM BI ATI, J.—Ramanathan v. Per era
471
will states that the devisees will be called as donees or beneficiaries in theproportions set out in the last will and, subject to the conditions andrestrictions and reservations, the child or children of any of the abovetake by representation the share his or her parent would be entitled to.The will also states that the children of Vettivel, Rajendram, Somasunderamand Sandanatn are entitled to an undivided § share of the capital and incomeof all the immovable and movable property in Schedules A and B.
The testator devises and bequeaths the properties contained in theschedule to the will to his trustees upon trust subject to the conditions,restrictions and reservations and for the purposes set out in the will.The will further states that, for these purposes, the trustees shall be vestedwith title to the said property immediately after his death and shall standBeized and possessed of the same for the purposes of executing and carryingout all the purposes of the trust. Among the conditions set out are thatthe donees should not mortgage, sell or alienate their shares but that, aftertheir death, the same shall devolve on their lawful heirs, subject to theproviso that should the necessity arise they could sell, alienate or mortgagetheir shares among themselves. The will also provides that the doneesare not entitled to receive the income arising from their shares until thetrust ceases as provided by the will. The donees are also prohibited fromselling, mortgaging or alienating their rights to the said income and anysuch act on their part is to make the share of such donees liable forforfeiture at the sole and absolute discretion t>f the trustee or trustees.The forfeited share should then devolve on the brothers and sisters ofthe said donees and, failing them, it should devolve on the other donees.The trust should terminate with the death, incapacity or refusal to act, ofthe last surviving of the original trustees. The trustees are given thepower of management of the testator’s business and the properties. Theyare also given power of investment, power to make advances and certainother powers.
On a reading of this last will, it is clear that the legal title to the property,which is the subject-matter of this action, vested in the trustees duringthe continuance of the trust and the beneficial interest is vested in thebeneficiaries, of whom Rajendram is one, but the enjoyment of the bene-ficial interest is postponed till the death of the last of the trustees. Inview of the clear words in the last will vesting defined shares in the doneesand the prohibition of alienation to outsiders, it cannot be said that theinterest of Rajendram is only a contingent one and not an assured andvested interest.
The counsel for the appellant further contended that the clause whichprovides that the child or children of any of the donees take by representa-tion the share of his or her parents, shows that the interest of the doneewas only a contingent one. We are unable to agree. This clause, in ourview, only provides for the substitution of the children to the interestwhich has already vested in the donees in the event of the death of thedonees.
472
Thendbandu v. Samarasekera
*
For these reasons, we hold that the judgment of the learned DistrictJudge should be affirmed and we dismiss the appeal with costs. Applica-tion No. 323 of 1960 presented by the plaintiff seeking a revision of thesame judgment of the District Judge is also dismissed.
T. S. Fernando, J.—I agree.
Appeal dismissed.