LAKSHMANAN CHETTIAR, Appellant, and MUTTIAH CHETTIAR, Respondent

089-NLR-NLR-V-50-LAKSHMANAN-CHETTIAR-Appellant-and-MUTTIAH-CHETTIAR-Respondent.pdf


HOWARD C. J.—Lakahmanan Chettiar v. Muitiah Chettiar
337
1948
Present: Howard C.J. and Canekeratne 3.
LAKSHMANAN CHETTIAR, Appellant, and MUTTIAHCHETTIAR, Respondent
S. G. 234—D. C. Gatte, X 56
Trust—Defendant attorney of plaintiff—Money owing to plaintiff—Endorsement of promissory note to third party by defendant as attorney—Assignment of decree—Fraud or fraudulent breach of trust—Burdenof proof—Prescription—Trusts Ordinance, Section 111.
Defendant was the attorney of the plaintiff who was a money lenderresident in India. Plaintiff had two debtors A and S. A gave apromissory note and a decree was obtained against the estate of S.Three days before leaving the service of the plaintiff the defendantassigned the decree to one Alagappa Chettiar and he had previouslyendorsed the Note to the same Chettiar who recovered the money from A.No consideration had been paid by the Chettiar. Plaintiff claimed thatdefendant was a trustee of these monies and liable ta account to theplaintiff. This action was brought more than six years after thetransactions in question.
Held, that in the absence of fraud or fraudulent breach of trust towhich the defendant was a party, the action was prescribed in terms ofsection 111 of the Trusts Ordinance for the reason that the money wasneither retained by the defendant nor converted to his own use.
Held further, that the burden of proving fraud was on the plaintiff.Fraud must be established beyond reasonable doubt and a finding offraud cannot be based on suspicion and conjecture.
B. V. Perera, K.G., with G. Renganathan, for defendant appellant.
F. A. Bayley, K.G., with M. Somotsunderam, for plaintiff respondent.
November 25, 1948. Howard C.J.—
The defendant appeals from a judgment of the District Court of Galleentering judgment for the plaintiff for the sum of Rs. 8,500 with legalinterest thereon at 5 per cent, from October 3, 1934, and the sum ofRs. 5,706*81 with legal interest thereon at 5 per cent, from January 15,1938, and costs. The plaintiff is a professional money lender who residesin India. The defendant was his agent and attorney at Colombo fromabout 1919 to January 28, 1933. Amongst the debtors of the plaintiffwere two persons, I. M. Alles and C. B. A. Samaranayake, both of Galle.Alles died while a sum of Rs. 6,500 and interest was owing to the plaintiff’sfirm on a promissory note (FI) for Rs. 7,000. Alles’ estate wasadministered by his executor Mr. W. R. de Silva. Samaranayake diedwhile a sum of Rs. 7,000 was due to the plaintiff’s firm. One E. C.Abeygoonewardene who had intermeddled with the estate of Samara-nayake was sued by the defendant as the plaintiff’s attorney in D. C.27,002 and a decree had been obtained on September 23, 1929, for a
15—L.
1J. N. A 89274—1,044 <6/4»)
Appeal
from a judgment of the District Judge, Galle.
Cur. adv. vult.
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HOWARD O. J.—Lakshmanan Chettiar v. Mutliah Cheltiar
aura of Rs. 8,619'20 with legal interest and costs. Of this sum Its. 2,695had been recovered and accounted for by the defendant. On January25, 1933, three days prior to his leaving the service of the plaintiff anddeparting for India, the defendant by P20 assigned this decree to oneA. Li. A. S. M. Alagappa Chetty for an alleged consideration of Us. 3,000.Alagappa had himself substituted as plaintiff in D. C. 27,002 and hasrecovered a sum of Us. 5,706'81 (vide P19). The defendant has alsoprior to January 28, 1933, endorsed promissory note PI granted by Allesto the same Alagappa Chetty who has recovered from the executor ofAlles’ estate the sum of Rs. 8,500 on October 3, 1934. It is the plaintiff’scase that the defendant assigned the decree and endorsed the note toAlagappa without plaintiff’s authority and with fraudulent intention,that no consideration received from Alagappa has been accounted for,that the assignment and endorsement had been made for the defendant’sbenefit and that through Alagappa has collected the sams mentionedand that the defendant is liable to pay the said sums to the plaintiff.
The position of the defendant is that the plaintiff’s business was failingand as he was in insolvent circumstances the plaintiff directed thedefendant to close the business at Colombo, to assign the decree toAlagappa and to endorse the note and to write off in the books the amountdue on the note. The defendant executed these directions. He receivedno consideration of, any nature from Alagappa, nor did Alagappa paysums recovered by him to the defendant. After the termination of hisservices the defendant rendered an account to plaintiff of his steward-ship. The plaintiff was satisfied and gave him a written discharge datedApril 28, 1934. Therefore the plaintiff is not entitled to maintain thisaction.
By his answers to the issues the learned Judge has held as follows :—
That the defendant wrongfully, unlawfully, fraudulently and
without the consent and approval of the plaintiff endorsed thepromissory note PI and assigned the decree in case No. 27,002for the sum of Rs. 3,000 to Alagappa Chetty, thereby misappro-priating the said note and decree or their proceeds.
That the said Alagappa recovered a sum of Rs. 8,500 on PI and a
sum of Rs. 5,706 • 81 under the said decree and the plaintiff wasentitled to recover the said sums from the defendant.
The frauds in connection with PI and the decree were discovered
by the plaintiff on or about February, 1942.
The defendant neglected and failed to hand over to the plaintiff
a sum of Rs. 3,000 alleged to be paid by Alagappa as considera-tion for the assignment of the decree in D. C. 27,002.
The consideration of Rs. 3,000 alleged to have been received by
the defendant prior to the execution of the deed was not paidin the presence of the notary. The learned Judge did notthink the consideration of Rs. 3,000 was paid by Alagappato the defendant. It was only a colourable transaction toenable the defendant to collect the monies due on the decreethrough Alagappa as his agent. Therefore it is not Rs. 3,000but Rs. 5,706.81 which the plaintiff is entitled to recover fromthe defendant.
HOWARD O.J.— Lahehmanan Chettiar v. Muttiah Chettiar
330
That the said Alagappa Chetty collected the two sums of Rs. 8,500
and Rs. 5,706*81 for and on behalf of the defendant and thelatter became the trustee of these two sums for the plaintiffwho is entitled to recover the said two sums with interestthereon at 5 per cent, from the defendant.
The defendant wrongfully and fraudulently represented to the
plaintiff that the two debts were irrecoverable and after therecovery of the same fraudulently and wrongfully concealedthe fact of collection from the plaintiff.
Defendant realized the sum of Rs. 5,706*81 through Alagappa
Chetty. There was no direct evidence that Alagappa Chettypaid the defendant this sum, but it is unlikely that AlagappaChetty double-crossed the defendant of the amount collectedby him on the assignment.
The defendant did not endorse PI or assign the decree at the
direction and on the orders of the plaintiff.
The defendant rendered an account to the plaintiff of the
defendant’s transactions as plaintiff’s agent, but failed to disclosethe fact of his assigning the decree and endorsing the note.All the account books were left with the firm and were availableto the plaintiff. No letters written by the plaintiff to thedefendant were handed to the plaintiff.
The plaintiff on April 28, 1934, gave the defendant a complete
discharge and acknowledged that the plaintiff had no presentor future claims against him.
The defendant did not hand over the books and papers to the
plaintiff relying on a representation that the defendant wasdischarged from all present and future claims.
The plaintiff’s causes of action were not prescribed.
It will be observed that the plaintiff’s case against the defendanthas been based on the contention {a) that the assignment of the decreein case No. 27,002 and the endorsement of the promissory note PI toAlagappa Chetty were fraudulent transactions and {&) that apart fromfraud the defendant was a trustee of these sums and liable to accountfor the same to the plaintiff. Both these contentions have been answeredby the learned Judge in favour of the plaintiff. With regard to (6) thedecision of the learned Judge is contained in (6) and (13). The reasonsguiding him to this decision receive but scant consideration in hisjudgment. So far as PI and the decree in case No. 27,002 were concernedthe relationship between the plaintiff and the defendant was that ofbeneficiary and trustee. Moreover, the question was one of an expresstrust. So far as prescription is concerned the matter is governed bysections 111 of the Trusts Ordinance,- Cap. 72. This section is worded asfollows: —
“ (1) In the following cases, that is to say—
in the case of any claim by any beneficiary against a trusteefounded upon any fraud or fraudulent breach of trust to whichthe trustee was party or privy ;
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HOWARD O.J.—Lakshmanan Ohettiar v. Muttiah ChetUar
Lb) in the case of any claim to recover trust property, or the proceedsthereof still retained by a trustee, or previously received bythe trustee and converted to his use ; and
(c) in the case of any claim in the interests of any charitable trust,for the recovery of any property comprised in the trust, or forthe assertion of title to such property,
the claim shall not be held to be barred or prejudiced by anyprovision of the Prescription Ordinance.
Save as aforesaid, all rights and privileges conferred by thePrescription Ordinance shall be enjoyed by a trustee in all actions andlegal proceedings in the like manner and to the like xtent as theywould have been enjoyed if the trustee had not been a trustee :
Provided that in the case of any action or other proceeding by abeneficiary to recover money or other property, the period of pre-scription shall not begin to run against such beneficiary, unless anduntil the interest of such beneficiary shall be an interest in possession.
No beneficiary as against whom there would be a good defenceby virtue of this section shall derive any greater or other benefit froma judgment or order obtained by another beneficiary than he couldhave obtained if he had brought such action or other proceeding andthis section had been pleaded.
Nothing in this section shall preclude the court from giving,effect to any application by a trustee for any equitable relief to whichhe would otherwise be entitled on any ground recognized by thecourt.
This section shall not apply to constructive trusts, except in sofar as such trusts are treated as express trusts by the law of England.”
The claim to recover this property arose in the case of Pi some fewdays prior to January 28, 1933, when it was endorsed to AlagappaChetty, and in the case of the decree in case No. 27,002 on January 25,1933, when it was assigned to Alagappa Chetty for Rs. 3,000 {vide P20).Section 111 (2) of Cap. 72 states that save as aforesaid all rights andprivileges conferred by the Prescription Ordinance shall be enjoyed by atrustee in all actions and legal proceedings and to the like extent as theywould have been enjoyed if the trustee had not been a trustee. In'these circumstances the claim comes within section 6 of Cap. 72 andaction must be instituted within six years unless it is a case that comeswithin sub-section (1) of section 111 of Cap. 72. The phraseologyemployed in section 111 is similar to that of section 8 of the Trustee Act,1888, which is worded as follows :—
“ (1) In any action or other proceeding against a trustee or anyperson claiming through him, except where the claim is founded uponany fraud or fraudulent breach of trust to which the trustee was partyor privy, or is to recover trust property, or the proceeds thereof stillretained by the trustee, or previously received by the trustee, andconverted to his use, the following provisions shall apply :—^
(a) All rights and privileges conferred by any statute of limitationsshall be enjoyed in the like manner and to the like extent
HOWARD C.J.—Lakshmanan Chettiar v. Muttiah Chettiar
341
as they would have been enjoyed in such action or otherproceeding if the trustee or person claiming through him hadnot been a trustee or person claiming through him.
If the action or other proceeding is brought to recover moneyor other property, and is one to which no existing statuteof limitations applies, the trustee or person claiming throughhim shall be entitled to the benefit of, and be at liberty toplead the lapse of time as a bar to such action or otherproceeding in the like manner and to the like extent as if theclaim had been against him in an action of debt for moneyhad and received, but so nevertheless 'that the statute shallrun agains a married woman entitled in possession for herseparate us', whether with or without a restraint uponanticipation, but shall not begin to run against any beneficiaryunless and until the interest of such beneficiary shall be an .interest in possession.
No beneficiary as against whom there would be a good defenceby virtue of this section, shall derive any greater or other benefit from ajudgment or order obtained by another beneficiary than he couldhave obtained if he had brought such action or other proceeding, andthis section had been pleaded.
This section shall apply only to actions or other proceedingscommenced after the 1st day of January, 1890, and shall not depriveany executor or administrator of any right or defence to which he isentitled under any existing statute of limitations.”
The comment in Lewin on Trusts on this section is as follows :—
“ The general effect of the section appears to be that in future,whenever an action is brought by a cestui que trust against a trusteeor any other person claiming through him, whether in respect of landor money, and whether the defendant is sought to be charged underan express or a constructive trust, there the defendant will be entitledto the protection which the section gives, unless the plaintiff canprove either (1) fraud or fraudulent breach of trust, or (2) that at thetime of action brought, the trust property, which is the subject-matterof the action, or the proceeds thereof, is or are still retained by thetrustee, or (3) that, previously to the bringing of the action, suchproperty or proceeds were received by the trustee, and converted tohis use. If the plaintiff brings his case within one of these threeexceptions, the old law will still apply ; if not, the section will takeeffect.”
The section has been the subject of judicial interpretation in severaleases. In How v. Earl Winterton x, the plaintiff, under a will on theexpiration of a term of fourteen years from the death of the testatrix(who died on May 20, 1875), became- entitled to an annuity for her life.During the term it was the duty of the defendant, as trustee under thewill, to receive the rents of certain devised estates, and after payment
1 (1896) 2 Oh. 626.
. N. A 89274(5/49)
342
HOWARD C.J*—Lalcshmanan Chetliar v. Atvttiah Ghettiar
of some immediate annuities, to accumulate the surplus rents andinvest the accumulations in the purchase of lands. The plaintiff’sannuity was charged upon the accumulations and the lands to bepurchased therewith, as well as upon the devised estates. Withoutany fraudulent intent the defendant, instead of accumulating the surplusrents, applied them in keeping down interest on incumbrances and innecessary repairs.
The term expired on May 20, 1889, the plaintiff’s annuity fell intoarrear in November, 1894, and on August 9, 1895, she brought this actionfor an account.
The .defendant had not trust moneys in his hands at the issue of thewrit, and had never converted any trust moneys to his own use ; and herelied on section 8 of the Trustee Act, 1888, but admitted that within sixyears before the issue of the writ he had rents in his hands which heought to have accumulated and invested :—It was held (1) that theplaintiff was entitled to an account of the moneys in the hands of thedefendant six years before the issue of the writ and liable to the trustfor accumulation, and also to an account of the rents which oughtafterwards to have been accumulated, but not to an account from thedeath of the testatrix ; and (2) that the case fell either within clause (a)or clause (6) of section 8 of the Act of 1888, but (per Rigby L.J.) prefer-ably within clause (a) ; and that whichever clause was applicable, thedefendant was protected from demands more than six years before theissue of the writ. ” At pages 640—641 Lindley L.J. stated as follows :—
“ Section 8 is cumbrously worded, and it is difficult to grasp theidea which underlies it; but the short effect of s. 8 appears to me tobe that, except in three specified cases, namely, fraud, retention bya trustee of trust money when an action is commenced against him,and conversion of trust money to his own use, a trustee who hascommitted a breach of trust is entitled to the protection of the severalStatutes of Limitation as if actions and suits for breaches of trustwere enumerated in them.”
Again the headnote of In re Bowden, Andrew v. Cooper 1 is as follows :—
" A newly appointed trustee of a will brought an action againstan old trustee and the representatives of two deceased trustees tocompel them to make good losses arising from investments negligentlymade on insufficient security more than six years before the action.R. G., the executor of D. G., one of the deceased trustees, had after33. G’s death issued the proper statutory advertisements andadministered the estate, retaining in hand two legacies which hadbeen bequeathed to him on trust. By leave of the Court at the trialthe statement of claim was amended to make it a claim against R. G.as trustee of the legacies and to follow the legacies into his hands,R. G. to be at liberty to claim the benefit of any statutes of limitation :—
Held, that having regard to Order xvi, r. 8, the cestuis que trustof the legacies were not necessary parties to the action.
1 (1890) 45 Oh. 444.
HOWARD C.J.—Lakshmanan Chettiar v. Muttiah Chettiar
343
Held, that section 8, sub-section 1 (a) of the Trustee Act, 1888(51 and 52 Viet. c. 59), did not apply to the case, but that section 8,sub-section 1 (b) did apply ; that under it R. G. was entitled to pleadthe lapse of time as he might have done in an action of debt, andthat, as the cause of action had accrued more than six years beforethe action, R. G. had a good defence.”
Also in re Gurney, Mason v. Mercer 1 it was held that “ the exception insection 8, sub-section (l)of the Trustee Act, 1888, which prevents a trusteerelying on the Statute of Limitations as a defence to an action to recoverthe proceeds of trust property ‘ received by the trustee and convertedto his use,’ does not, in the absence of fraud, apply where trust fundsadvanced on mortgage are, with the concurrence of the mortgagor,applied in payment of debt previously charged on the mortgagedproperty in favour of a bank in which the trustee is a partner.”
The words “ converted to his use ” were considered by Kekewich J.in re Timmis, Nixon v. Smith 2 in the following passage :—
“ As I pointed out in the argument, the Legislature has carefullyused the word 1 retained ’ as meaning what it says, namely, moneywhich is not merely in the eye of the law in the hands of the trustee,because he has never paid it away to a person entitled to give a dis-charge, but money which is really in his pocket in the sense that it isinvested in his name, or in land belonging to-him, or in the name ofsome other person as trustee for him. In order to say that it is‘ retained ’, you must be able to put your finger on the property orthe proceeds and say that it is still under the control of the trustees.There is no suggestion that that can be done here, but it is said that thecase can be brought within the succeeding words. It is said that eachof the three trustees must be taken to have received one-fourth ofthe share belonging to the children of Ann Pointon, and to haveconverted such fourth to his use. I pointed out to Mr. Renshaw thatin that point of view, if entitled to succeed, he is entitled to go againsteach trustee in respect of a fourth, and not against three trustees inrespect of three-fourths, because the statute points only to the personaluse by a trustee, and does not speak of the payment by one trusteeto another, which, after all, is only a breach of trust as much as a pay-ment to a stranger who is not a trustee. Then Mr. Renshaw saysPeter Smith (to take his case) has received and converted to his useone-fourth of this share, and therefore the case is taken out of thestatute, and of course the plaintiff is entitled to an amount of that.The answer to that is, that Peter Smith was himself entitled to aone-fourth share ; that this is not the case of a trustee putting intohis own pocket what belongs to a cestui que trust so as to defraudthe cestui que trust, but he only appropriated to himself that whichthe will gave him. I think that answer is complete. The point isa new one, and at first I felt some difficulty about it, but I think thatwhen one looks at the statute there can be no doubt what was meant.The intention of the statute was to give a trustee the benefit of thelapse of time when, although he had done something legally or1 (1893). 1 Oh. 590.2 (1902) 1 Oh. 176 at pp. 185-186.
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HOWARD C.J.—Lalcehmanan Ghettiar v. Muttiah Chettiar
technically wrong, he had done nothing morally wrong or dishonest, butit was not intended to protect him where, if he pleaded the statute,he would come off with something he ought not to have, i.e., moneyof the trust received by him and converted to his own use. Thatseems to me the proper construction of the words, and I think thecontext confirms that view. Here Peter Smith (and so with the others)only received that to which he was entitled. They ought to haveput one-fourth of the fund apart. Whether they did that or notcould not in the least interfere with their right to receive their ownshares ; and it would he extremely hard to say that, having paidthemselves what they were entitled to, they were not to have theadvantage of the statute as to which ought to have been paid to acestui que trust. ”
In my opinion this is not a claim to recover trust property or the-proceeds thereof stillretained by a trustee. Nor was the trust property orproceeds thereof previously received by the defendant and convertedto his use. Nor in view of the learned Judge’s finding referred to in(5), was part of the trust property or its proceeds converted to the useof the defendant. In the absence of fraud or fraudulent breach oftrust to which the defendant was party or privy the claim should havebeen brought within six years from January 28, 1933. As the actionwas not instituted till January 29, 1942, the Prescription Ordinanceapplies and the claim is statute barred.
The next point for consideration is whether the learned Judge was-right in holding that the defendant when he endorsed PI and assignedthe decree in case No. 27002 to Alagappa was guilty of fraud or fraudulentbreach of trust. The following passage occurs in the judgment:—
“It is admitted that the defendant assigned the Samaranayakedecree and assigned Alles’ note to Alagappa Chetty. That beingso the burden rests on him to prove that he did so at the instance ofthe plaintiff.”
The burden of proof is thus placed on the defendant.
In A. L. N. Narayanan Chettyar and another v. Official Assignee, HighCourt, Rangoon, and another 1 it was held that fraud, like any other chargeof a criminal offence whether made in civil or criminal proceedings, mustbe established beyond reasonable doubt. A finding as to fraud cannotbe based on suspicion and conjecture. The burden of proof in regardto fraud has therefore been placed by the learned Judge wrongly on thedefendant. For this reason the judgment cannot stand. Even withthe burden so placed I am of opinion that the defendant has raised areasonable doubt as to whether he was guilty of fraud when he assignedthe decree and endorsed PI in favour of Alagappa Chetty. It has notbeen established that the defendant obtained any financial advantagefrom these transfers. His power of attorney ceased on January 28,1933, from which date he was no longer the agent of the plaintiff. Fromthat date Chinniah held the power of attorney and was the agent ofthe plaintiff. Again the relationship between the latter and Alagappa1 1941 A. I. R. (P C.) 93.
HOWARD C.J.—Lakshmanan Chettiar v. Muttiah Chettiar
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Chetty is a factor requiring careful consideration when one embarks onan inquiry as to whether the defendant in making the transfers toAlagappa was acting bona fide and carrying out the plaintiff’s instructions.According to the plaintiff the defendant’s instructions prior to handingover to Chinniah in January, 1933, were “ to collect whatever possiblefrom my assets, pay as much as possible to the creditors, and then handover the remaining assets to Chinniah and come over to India.Chinniahpulle was to go on carrying on as best as he could.” It isquite obvious from this that the defendant on October 29, 1932,informed the plaintiff that Alles’ debt was recoverable. In regard tothe assignment of the decree and the proceedings for the recovery ofthe amount due thereon by Alagappa it is quite obvious from the letters ofChinniah, the plaintiff’s agent, to Alagappa dated February 14, 1933,and December 8, 1933 (D7 and D8) that Chinniah was aware of theassignment and the proceedings taken by Alagappa. The fact thatChinniah was aware of the proceedings instituted by Alagappa for therecovery of the money owed by Samaranayake’s estate suggests thatdefendant in making the assignment to Alagappa was acting on theplaintiff’s instructions or to put this evidence at its lowest value fromthe defendant’s point of view it raises a reasonable doubt as to whetherhis conduct was fraudulent. So it may also be said of Alles havingregard to the defendant’s letter (D6). Again the relationship ofAlagappa Chetty with the plaintiff raises a reasonable -doubt as towhether the defendant has been guilty of a fraud. Plaintiff in evidencestates that Alagappa is a relation of his. An adopted son of his sonis married to the plaintiff’s daughter. This is what the plaintiff stateswith regard to the suggestion of the defendant that he had instructionsfrom the plaintiff to endorse PI and assign the decree in case No. 27002to Alagappa :—
“ In 1932, Alagappa Chettiar was in India. I saw him in India.I did not send him to Colombo to settle my accounts. He did notcome to my firm of A. T. K. P. L. M. On one occasion when he cameto my house he told me that he was going to Ceylon to see to hisbusiness in Pussellawa. So I suggested to him to settle my mattersand to assist Letchimanan in settling my affairs in Colombo. I do notknow whether he complied with that request. I do not know whetherhe stays in my firm when he stays in Colombo. The defendant wroteto me that Alagappa Chettiar did not come to the shop in Colombo.I do not remember whether I wrote to the defendant informing himthat Alagappa Chettiar would come to the shop to assist him. I donot know whether I have got a letter written by Letchimanan statingthat Alagappa did not come to my shop at Colombo. I have gotseveral letters, but I have to examine them. That copy was in thepress copy book. I will have to ask my agents and find out the date.Chinniahpulle and Velaithan Chettiar are my agents. I toldAlagappa Chettiar—‘ when you go to Colombo, assist the defendantin settling my affairs by recovering as much as could be recoveredand paying off the creditors ; the defendant was in Colombo alone ;and I would like to see the affairs wound up decently.’ That wasin 1932. I do not remember whether it was during the end of 1932.
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Pablis v. Eitginahamy
It was in the latter part of 1932. At that time Alagappa and I werenot friends as he had failed to repay my loans. In spite of that I hadconfidence in him. He was my relative and my son’s adopted sonwas married to his daughter and therefore I requested him to do that.
I therefore had confidence in him.
Q.—Alagappa Chettiar never deceived you 1
A.—He borrowed Es. 80,000 and arranged to pay the amount huthas been paying me little from time to time.
Isn’t that deception 1
Still because he was my relative and my Sammandie, my son’sadopted son had married his daughter, therefore I thought he wouldnot play me false. We are even now on speaking terms. I will nottrust him with regard to money matters. It may be that when Ihad some disputes here and there I had asked him to be a jointarbitrator with others on my behalf.”
Later in his evidence plaintiff states that about 5 or 6 months ago ina dispute in the village he asked Alagappa to be an arbitrator. Theplaintiff concedes that Alagappa was instructed to assist the defendantin settling his affairs by recovering as much as could be recovered. Thisevidence of the plaintiff raises a reasonable doubt as to whether he isspeaking the truth when he says he did not instruct the defendant totransfer the rights in Samaranayake’s and Alles’ debts to Alagappa.I think that fraud has not been established beyond all reasonable doubt.
The appeal is allowed and judgment must be entered for the defendantwith costs in this court and the court below.
Canbkeratbb J.—I concur.
Appeal allowed.