047-NLR-NLR-V-18-LOUIS-v.-DINGIRI.pdf
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[Full Bench.]
Present: Wood Benton G.J., Shaw J.. and De Sampayo A.J.
LOUIS t>. DINGIBI.447<—D. C. Matara, 6,378.
A)if nation in fraud of creditors—Action to set aside deed—Facta pro-banda—Donation by one spouse to another—Subject to donor's debtsexisting at date of donation only.
In an action to have a deed set aside on the ground that- it wasan alienation infraud ofcreditors, theplaintiff must prove affirm-
atively that the alienor intended to defeat the claims of hiscreditors, that the alienation left him with practically no propertyout of which each claims could be met, andthat particular
creditors, including the creditors impeaching the alienation, had' infact been prevented by it from recovering what was their due.
The provision of section 13 of Ordinance No. 15 of 1376, thatgifts by one spouse in favour of the other shall be subject to thedebts and engagements of the donating spouse, most be limited(in the absenceof faud)to debts andengagements existing at the
time of the alienation, and not to' future debts.
fpHE facts appear from the judgment, *
Bawa, K.C., and Dias, for defendants, appeallants.
A. St. V. Jayewardone (with him Canekeratne), for plaintiff,respondent.
The following authorities were cited at the argument:—Laws ofEngland, vol. XV., pp. 87-88, s. 180; McQueen's Husband and Wife,pp.269, 271, 2649265; Pereira's Laws ofCeylon, vol. II., p. 661;
1N. L. i?. 131: 4A. C. R.160; 4 N. L.R. 81; 2 Leader, pt. II.,
P. 11; 2 S. C. D. 55; 3 N. L. R. 287; 5 Bal. 32.
Cur. adv. vvlt.
February 12, 1915. Wood Benton C.J.—
The plaintiff is the purchaser, on a Fiscal's transfer dated May12, 1914, at a sale in execution against the 2nd defendant in case D.C.Matara, No. 5,676. That action was instituted on September 21,1912. The 2nd defendant had previously, viz., on June 2, 1912,gifted his residing house and land to his wife, the 3rd defendant,and their children. The action D. C. Matara,. No. 5,676, wasdismissed with costs on the ground that the issue had alreadybeen decided against th 2nd deefendant in another case, C. B.Matara, No. 5,581, between the same parties. Writ issued for therecovery of costs in D. 0. Matara, No. 5,676. The property in
6J. X. A 99008 <»/S0)
1915.
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1M6. question in the present case was seized in execution of the writ.Wood When the plaintiff, the execution purchaser, went to take possession.
Renton C.J. the 2nd defendant resisted him, alleging that the property belongedfavfoV'to 4iis wife under the deed of gift of June 2, 1912. The plantiff,
Dlngirttherefore, brought this action to have the deed set aside as fraudulent*
Thu learned District Judge has given judgment in his favour, onthe grounds, in the first place, that the alienation was fraudulent:and, in the second place, that even if it were not, the property seizedwas liable for the 2nd defendant’s debts under section 13 of theMatrimonial Rights and Inheritance Ordinance, 1876, No. 15 of1876. The case was referred by my brokers Shaw and De Sampayoto a Bench of three Judges for the consideration of this latterpoint. At the argument before us, however, counsel for the plaintiffstated that he desired to support, and we gave him the opportunityof supporting, the judgment of the learned District Judge, also onthe ground that the donation by the 2nd defendant in favour of hiswife was fraudulent. The appeal is, in my opinion, entitled tosucceed on both grounds. The burden of establishing fraud restedon the plaintiff, and the facta probanda in such a case as this arewell settled. It must be shown affirmatively that the alienorintended to defeat the claims of his creditors, that the ailenationleft him with practically no property out of which such claimscould be met, and that particular creditors, including the creditorimpeaching the ailenation, had in fact been prevented by it fromrecovering what was their due. (Silva v. Mad,' Podi Singho *.Appuhamy2) The criteria of fraudulent alienation adopted by theEnglish Courts in interpreting the Statute of Elizabeth (13 Eliz.c. 5) have frequently been referred to in our local decisions(Carpen Gketty v. Chris tinahami* Saravanai Arumugam v. KantliarPonnampalam), but constitute in this Colony merely ratio script a.The rule of law is to be sought for in the common law, and not inthe English decisions unde that Statute. (Silva v. Mach, ubi sup.)It seems to me that, in the present case, the evidence against the2nd defendant cannot be put higher than this, that he desired tosafeguard the property gifted to his wife against being made liablefor bis debts, or at any rate for the results of the litigation on whichhe was about to embark. That is not sufficient to make the alien-ation fraudulent, in the absence of affirmative proof that he hadno other poperty against which his creditors could have recourse.;
It remains to consider the effect of section 18 of the MatrimonialRights and Inheritance Ordinance, No. 15 of 1875. That sectionis as follows:It shall be lawful for any husband or wife, whether
married before or after the proclamation of this Ordinance, notwith-standing the relation of marriage and notwithstanding the existenceof any community of goods between them, to make or join eafch
a 2 S. C. D. 05.
4 (1909) 9 fxader L. R.t Part J?, p. II.
(1876) 1 N. L. R. 131.
(1900) 4 N. L. /?. 81.
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other in making, during the marriage, any voluntary grant, gift, or *9*8-settlement of any property, whether movable or immovable, to, woodupon, or in favour of the other; but all property so granted, gifted, ®SH»esr©.J.or settled, and all acquisitions made by a husband or wife out of Louis e.or by means of the moneys or property of .the other, shall, except ibtoghrias otherwise provided by section 11, be subject to the debts andengagements of each spouse in tire some manner and to the same’extent as if suoh grant, gift, settlement, or acquisition had not beenmade or occurred/1'
*
Section 11 declares a married woman’s peiSonal ornaments,wearing apparel, and implements of trade or husbandry to be herseparate property. The scope of the liability tor the debts andengagements of the donating spouse has not, so far as I am aware,been the subject of judioial decision hitherto hi this Colony. Butit must, I think, be limited to debts and engagements existing atthe time of the alienation. We are not now concerned, of course,with the effect of fraud. The objeot of the Legislature in section IBof tiie Ordinance of 1876 was to relax the common law in favourof spouses. It cannot reasonably be supposed to have intendedthat property donated by one spouse to another should be earmarkedfor all time with a liability to meet all the debts and engagementsincurred by the donor at any subsequent period, and that. thespouses should be in a worse position than that which they occupiedunder the old law of community. I would set aside the decree ofthe District Court, and direct- that plaintiff’s action be dismissedwith the costs of the action and the appeal.
Bb Sampavo A.J.—
I am of the same opinion on both the points submitted for decision.
Shaw J.—
I agree on both points. With regard to the first point I do notthink the evidence of fraud given in this case would be sufficientunder the English law to bring the case within the dictum inHalabury, vol. XV., p. 84, upon whioh^ the District Judge largelybased his decision. The authorities cited in that passage, and insomewhat similar passages on the following page, disclose muchstronger evidence of fraud than in the base before us. But thiscase is to be deoided by Roman-Dutch law, not English/ and Itappears that two essentials for setting aside the deed have not beencomplied with, namely, no evidence has been given that at the timeof the ■ conveyance the appellant was rendering himself practicallyinsolvent, and no evidence has been given of any attempt to executethe decree on his other property.
With regard to the other point, .tire words of the section areambiguous, and might, I think, equally be' read as imposing a -liability on the prpoperty either for debts incurred at the time of .tiie conveyance only, or for all debts whensoever incurred.
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8ataw A
( 1«4 )When we look at fte intention, however, I think the meaning iadear* The Intention of the section, although it refers to gifts byeither spouse, is, with various other seetions in the Ordinance, aimedat giving the wife certain rights of property, somewhat in the natureof those conferred by tb$ earlier English Married Woman’s PropertyActs, and are intended to improve the position of the wife with regardto property. As the Chief Justice had pointed out, the position ofa wife married In community receiving a gift under this sectionwould, if the respondent’s contention was accepted, be worse thanbefore. Moreover* if this reading were adopted, it would renderthe property gifted to a spouse liable throughout the marriage anduntil' the debts of the donor are all paid, for any particular debt atthe caprice of the creditor, although there might be ample otherproperty on which to levy for his debt. It would also enable ahusband, who wished to avoid his gift, by arrangement with anycreditor, to defeat the donation he had made. Such unreasonableresults cannot, I think, have been intended by the Legislature.
Set wide.