039-NLR-NLR-V-52-MARIKKAR-Appellant-and-LEBBERespondent.pdf
d950Present : Dias J. and Gunasekara J.
MARIKKAR, Appellant, and LEBBE, RespondentS. C. 334—D. C. Kandy, 2,012
Trusts Ordinance {Cap. 72)—Sections 5 (3) and 84—Transfer of immovable propertyto one person for consideration paid by another—Transferee’s position as trusteeOral evidence—Date of action and rights of parties—Appeal—Questions offact—When Court will interfere
Out of money which defendant was holding1 in trust for the plaintiff certainimmovable property was bought in the name of the defendant.
Held, that, under section Si of the Trusts Ordinance, the plaintiff was entitledto a declaration that the defendant held the property as trustee for the plaintiffand to a conveyance of the premises by the defendant to the plaintiff.
Held further, (i) that, under section 5 (3) of the Trusts Ordinance, extrinsicoral evidence was admissible to establish the trust.
that, although the defendant had not obtained legal title to the propertyprior to the date on which the plaint was filed, the action was maintainable ifthe plaintiff could show that he was vested with legal rights to the ownershipof the property.
that the appellate Court is free to reverse the conclusions of a trialJudge if the reasons for his judgment are unsatisfactory ; but this should bedone in the rarest cases and when the Court is convinced by the plainestconsiderations that it is justified in holding that the trial Judge has formed awrong conclusion.
jA. PPEAL from a judgment of the District Court, Kandy.
A. Hayley, K.C., with Cyril E. S. Perera, H. W. Jayezuardene 'and-M. Rafeek, for the defendant appellant.
H. V. Perera, K.C., with jS. J. V. Chelvan ay again, K.C., and if. TV.'Tambiah, for the plaintiff respondent.
Cur. adv. vult.
March 21, 1950. Dias J.—
This appeal involves the determination of two questions. The firstinvolves a question of mixed law and fact, namely, whether the DeedP54, dated October 19,1945, in favour of the defendant appellant
^created him a trustee of the interests conveyed by that deed for theplaintiff respondent? And secondly, a pure question of fact, namely,“what sum if any is due from the defendant to the plaintiff?
The defendant appellant is the paternal uncle of "the wife of the .plain-■tiff respondent. He is a well-to-do business man. He had been employedin the Ceylon Government Railway’ and had also been a postmaster.Tie is a member of the Nawalapitiya Urban f/ouncil and was once itsvice-chairman. He is a Justice of the Peace and an Unofficial Magistrate.Therefore, the defendant, not only is a : man of influence and- position,
7but also, being a business man, knows or should be aware of businessmethods. On the other hand, until the events we have to consider tookplace, the plaintiff appears to have been a trader in timber on amodest scale. Therefore, while he too must be regarded as a man who-knows business methods, from the positions occupied by the two men,one feels that a higher standard is to be expected from a person like thedefendant.
Owing to conditions created by the second World War, the naval andmilitary authorities in Ceylon were irb urgent need of large supplies oftimber and were prepared to pay fancy prices for them. Therefore,about February, 1944, the plaintiff began to supply timber to the autho-rities. It is true he had some capitdl and a stock of timber, but substan-tial sum of ready money were needed to pay the suppliers of timberand, as the plaintiff puts it, “to get his tenders accepted”. His father-inlaw (the brother of the defendant) rendered some help, but this wasin adequate. The plaintiff, therefore, naturally approached the defendantto act as his financier.
The District Judge has found that the agreement between the plaintiffand the defendant was as follows : —(a) The defendant was to finance theplaintiff in regard to the latter’s timber business; (6) As security, theplaintiff undertook to indorse and hand over to the defendant all chequesand drafts received from the authorities in payment for timber supplied;,
This money the defendant was to keep for the plaintiff. In other words,,the plaintiff’s case is that the defendant became the trustee of this moneyfor the plaintiff; (d) The sums of money which the defendant advancedto the plaintiff were to be regarded as loans to the plaintiff; and (e) inconsideration for the assistance provided, the defendant was to be givena half share of the profits of the timber business.
Although the defendant attempted to prove that he and the plaintiffwere partners, the District Judge has disbelieved him on this pointCounsel for the defendant in appeal did not argue that this business wasa partnership. I am of opinion that the learned District Judge has rightlyrejected the defendant’s contention that he and the plaintiff were part-ners. The finding affects the credit of the defendant in regard to otherquestions of fact.
The business, therefore, belonged to the plaintiff. His contracts with.-the naval and military authorities terminated on November 9, 1945.During this period not only did the plaintiff supply large quantities oftimber to the authorities and received in payment cheques and draftsfor large sums of money, which he in pursuance of this agreementindorsed or paid ovfer to the defendant, but the defendant for his part-also made advances of considerable sums of money to the plaintiff tofinance the business as agreed on.
The case for the plaintiff may be summarized as follows: —The moneyin the hands of the defendant, after deducting the sums advanced by thelatter on account of the plaintiff, were held in trust for the plaintiff.With-a portion of that money on October 19, 1945,' certain premises in.Kotmale Road, and Ambagomuwa Road, Nawalapitiya, were purchased inthe name of the defendant in trust for the plaintiff. It is further
.alleged that the parties having fallen out, the ^.defendant wrongfullytools; possession of the account books of the business, thereby renderingqn accounting impossible. The plaintiff, therefore, in this action askedfor an accounting of all moneys deposited by him with the defendant; forthe recovery of the money found to be due after such an accounting;for a declaration that the defendant is holding the said premises conveyedin. his name as trustee for the plaintiff; and for a conveyance of thosepremises by the defendant to the plaintiff. Plaintiff valued his actionat Es. 125,000.*
The answer of the defendant is a total traverse of the plaintiff’s case.His ease as outlined in the answer is $iat in April, 1944, the defendant andthe plaintiff commenced business in partnership with a capital exceedingEs. 1,000 and that the capital and the nett profits were to be sharedbetween the plaintiff (J), plaintiff’s father-in-law (J) and the defendant■(£). The defendant pleaded that this partnership offended against theprovisions of s. 18 (c) of the Prevention of Frauds Ordinance (Chap. 57)and that, therefore, plaintiff’s action was not maintainable. The defen-dant further pleaded that in May, 1945, accounts were looked into forincome tax purposes, and the partners took their respective shares of theprofits, and the business was finally closed in October, 1945. He alsopleaded that from April 1, 1945, to the end of October, 1945, a sum ofEs. 46,836.34 was due to him from the plaintiff, being money advancedby him to the plaintiff. Curiously, he made no claim in reeonventionfor this sum, but “ reserved his rights ” to sue the plaintiff for this sum.He denied that he took the books of the business and asserted that theywere with the plaintiff. He further pleaded that the alleged trust■cannot be enforced because it was not in writing, and not in accordancewith the requirements of the law. He finally pleaded that the plaintdisclosed a misjoinder of causes of action.
The parties went to trail on the following issues: —
j.. Was the plaintiff in 1944-45 carrying on the business of supplyingtimber to the Services and other buyers? The learned DistrictJudge answered this issue in the affirmative.
. -2. Did the defendant agree to lend and advance to plaintiff a portionof the money required for carrying on the said business? Thisissue was answered in. the affirmative.
-3. Was it agreed—(a) that plaintiff should endorse and deliver todefendant for collection all cheques received by the plaintiff aspayment for timber supplied by him? *(b) that defendantshould hold in trust for the plaintiff all moneys in excess of theamount needed to pay defendant back his advances? Both thequestions raised in this issue were answered in the affirmative.-4.(a) What is the full amount of defendant’s advances to plaintiff ?
.The District Judge held that the amount was Es. 495,503.
-(6) What is the value of the cheques endorsed by plaintiff to
.defendant ? The District Judge held £fiat this was Es. 657,463.
<(c) What amount, if any, is the excess over 4 (a) ? The DistrictJudge held that this amounted to Es. 161,960.
If issue 4 (e) answered in. favour of plaintiff—•
(a) Did defendant hold such, excess in trust for the plaintiff?'This issue was answered in the affirmative.
(i>) Was such excess or any portion of it paid as a contribution!for the purchase of the property described in the Schedule-of the plaint? The District -Judge held in the afifir-■mative.
<
,If issue 5 is answered in favour of the plaintiff, did defendant
hold the said profits in trust for the plaintiff? This issue hasbeen answered in- the affirmative.
Is the defendant liable to (a) render an account in terms of prayer-
(a) of the plaint, and pay the plaintiff the amount found dueon the account? The Court answered this issue in the affir-mative—(1>) convey and deliver possession of the property in-question to the plaintiff? The Judge held that this issue-did not arise.'
What amount, if any, is due to the plaintiff ? The District Judge
assessed this at Rs. 5,965.
Did the defendant expend moneys for and on behalf of the business
referred to in the issues ? The Judge while answering thisissue in the affirmative, also held that such moneys were nofcexpended in cash.
If so, has such expenditure to be taken into account in -obtain-
ing the amount put in issue in 4 (c) ? The Judge held thatthis issue does • not arise.. ’ .
Were the plaintiff and the defendant engaged in the said business-
in partnership? This issue was answered in the negative-
Was the capital of the said partnership over Rs. 1,000 ?•
^ If so, is the plaintiff entitled to maintain this action ? The-' District Judge held that issues 12 and 13 did hot arise.
Were the accounts of plaintiff and defendant in respect of the
said business looked into and settled in or about May, 1945,.for the Income Tax Year ending March 31, 1945? The Judgeanswered this issue in the negative.
What sums, if any, were contributed by defendant between
April 1 and October, 1945? The Judge held that this issuedoes not arice.
^What sums were received by the defendant in respect of the said
business for the said period ? The finding of the learnedDistrict Judge is “ As in D178 under the head ‘ Plaintiff’sCase’ ”. D178. is a statement prepared and produced by thedefendant showing the monetary position both from the plaintiff’s_ .and defendant’s points of view for the whole period involved.
. 17,. Is. the plaintiff liable to pay defendant the deficiency, if any ?
The District Judge has recorded that this issue was withdrawn.He also held that there was no deficiency.
Was the business in fact a partnership with a capital of over
Es. 1,000 ?•
If so, can plaintiff recover any sum whatsoever on the account
in his plaint ? The Judge held that issues 18 and 19 did notarise.
Is there a misjoinder of causes of action in contravention of
s. 35 (1) of the Civil Procedure Code? The Judge has recordedthat issue 20 was withdrawn. It is to be noted that immediatelyafter the issues were framed, counsel for the defendant movedthat issue 20 should be taken up for decision in the first instance.Counsel for the plaintiff* objected, and the Judge recorded“As issue 20 will not dispose of the case, this question of mis-joinder will be decided later along with the other- issues.Besides, there is no argument on facts to enable me .to decidethis issue at this stage”.
It will be convenient in the first place to deal with the question oftrust. On the findings of the learned District Judge, it is clear that theplaintiff had, in pursuance of the agreement between the parties, entrust-ed to the defendant large sums of money which he had received from thenaval and military authorities.
The premises in Kotmale Eoad and Ambagomuwa Eoad, Nawalapitiya,belonged to a man named Abdul Eahiman Saibo. This man had executedwhat was tantamount to an English-law mortgage of these propertiesto one Karuppiah. The transaction took the form of an out and outconveyance to Karuppiah with an agreement by the latter to re-transferthe same to Abdul Eahiman within seven years on repayment. of themoney to Karuppiah.' At the dates material to this -action, AbdulEahiman had instituted D. C., Kandy, 1,349, against Karuppiah to redeemthe mortgaged lands. That case was instituted in August, 1944,. anddid not terminate until October 16, 1946—see P69. Therefore, duringthe dates material to the present action, D. C., Kandy, 1,349, was pending.Begal title to the premises was vested in Karuppiah, while Abdul Eahiman-was trying to redeem the lands and obtain a conveyance for them inhis favour from Karuppiah. About the middle of 1945, i.e.,- after plain-tiff had been supplying timber to the authorities for a few months, hewent to India to meet Abdul Eahiman. Plaintiff says that he under-took that journey because he wanted to buy these premises for himself.On the other hand, the defendant says that the plaintiff went, to Indiaa$ his agent, and that it was he who wanted to purchase the property.It is curious that, if defendant wanted to purchase these lands for him-self, he should not have gone himself, but should send the plaintiff whoat this time was extremely busy with his timber contracts needing hispresence in Ceylon. It is also curious that, . if plaintiff was not theprincipal but only the agent of the defendant, he should have told AbdulEahiman that he was the purchaser, or that Abdul Eahiman shouldin his power of attorney P53‘ of August, 15^45, to Ismail, authorize hisattorney to convey the property to the plaintiff and not to the defendant,Abdul Eahiman is a neutral witness. There is no reason at all why heshould side either with the plaintiff or the defendant. . His evidence on
this point ii <6leer and specific. In my opinion, the learned DistrictJudge rightly accepted his evidence. Abdul Eahiman’s evidence isthat plaintiff came all the way to India and told him that he (plaintiff)came to buy the property. He wanted to buy it for himself. AbdulPahiman agreed. In that connection he sent a power of attorney tohis son-in-law Ismail authorizing him to enter into an agreement withplaintiff to transfer the property. P53 is the power of attorney. Whenplaintiff was in India he gave Abdul Pahiman Es. 2,000 by cheque.P52 is the cheque. Abdul Pahiman says that the agreement was to sellthe property for Its. 120,000. Over and above that plaintiff agreed togive Abdul Pahiman Ps. 5,000. Out, of that sum of Ps. 5,000 plaintiffgave him Ps. 2,000 by cheque P52. It is plaintiff’s private cheque.The power of attorney P53 to Ismail recites “Whereas I have agreed with,A. M. T, Lebbe (plaintiff) to sell and transfer unto him” the said premises.If defendant’s evidence is true, and plaintiff was merely his agent, thereis no reason why Abdul Pahiman should falsely state otherwise, or thatplaintiff should give Abdul Pahiman his personal cheque, or that thepower of attorney should not have stated that the agreement was to sellto the defendant, or that the attorney should be authorized and empower-ed to put the deal through with the defendant. It is, therefore, quiteclear that plaintiff as a principal and not as defendant’s agent wasnegotiating for the purchase by him of the premises in question. TheDistrict Judge has held that the evidence of the defendant is false whenhe swore that plaintiff acted as his agent. I am unable to hold that thelearned Judge erred in reaching that conclusion.•
Unfortunately, when the lawyers in Ceylon went into the questionsinvolved they discovered that the matter was not as simple as it hadseemed to be. Therefore, Abdul Pahiman had to come to Ceylon. Mr.Ameen, Proctor and Notary Public, Kandy, was entrusted with the matterand on October 19, 1945, three documents were executed, namely, Deed5,04!—P54, Deed 5,042—D28, and the agreement D 25.
.P54 recites the relevant facts and by it Abdul Pahiman as assignor
transferred to the defendant (the assignee) “all rights, advantages andbenefits in and to the action No. L 1,349, and*in and to the right to obtain•a retransfer.together with all rights on agreement No. 2,384, and in andto the properties in the schedule, unto the asignee and his aforesaidabsolutely and for ever with full power and authority unto the assigneeto have himself added or substituted as party plaintiff to the said actionNo. L 1,349 aforesaid and to prosecute the said action in such manneras advised The consideration for this assignment is stated to bePs. 120,000. The assignor Abdul Pahiman undertook to warrant anddefend the assignee’s title to the interests conveyed. The notary’sattestation clause in deed P54 shows that of the consideration ofPs. 120,000, a sum of Ps. 60,000 was retained with the assignee(defendant) to deposit in Court in case No. D 1,349, a sum of Ps. 30,000 wasacknowledged to have been received previously, and the balance Ps. 30,000was also retained with the assignee to be paid as agreed upon. One of theattesting witnesses to deed P54 is the plaintiff.
The agreement D25 executed at- the same time and place betweenAbdul Pahimaii and the defendant refers to P54. They mutually agreed
that out of the consideration of Its. 120,000 referred to m P54, the defen-dant was to deposit Bs. 60,000 to the credit of D."C., Bandy, 1,349 B forthe use and benefit of the defendants to that action (Karuppiah), AbdulBahiman acknowledged receipt of Bs. 30,000 out of the consideration,stated in P54 and the parties mutually agreed to various collateral mat-ters such as the manner in which the balance consideration of Bs. 30,000was to be paid, and what this defendant had to do in connection with theaction against Karuppiah.•
The other deed D28 executed* on the same day is a mortgage, tbemortgagor being Abdul Bahim and the mortgagee the defendant, inregard to a sum of Bs. 5,000 lent*to Abdul Bahiman. The notary Mr.Ameen in the attestation clause certified “ That the full considerationherein was paid in cash in my presence ”. The District Judge has held,and I agree with him, that this bond D28 is a separate and independenttransaction which has no connection with the transaction embodied inthe documents P54 and D25..
D28 was produced only when Abdul Bahiman Saibo was being cross-examined after the plaintiff had given evidence. He, therefore, hadno opportunity of explaining D28. Abdul Bahiman Saibo says that hehad arranged with the plaintiff to borrow Bs. 5,000 on a mortgage on thesame day. He says it was the plaintiff who gave him the money, and outof that loan he paid Bs. 1,400 as expenses for the deed. The landsmortgaged in D28 are different lands from the premises dealt with inP54.
Plaintiff’s ease is that under deed P54 the defendant became the trusteeof the plaintiff. The defendant denies this, and further urges that oral'evidence cannot be led to vary or contradict the terms of that deed.
I am of opinion that extrinsic evidence is admissible in the circum-stances of this case. If the plaintiff’s contention is true, then a Courtof Equity has the right to examine the transaction independently ofwhat P54 says. S. 5 (3) of the Trusts Ordinance entitles the Court todo so—see Vdlliammai Atchi v. Abdul Majeed . To deny plaintiff theright to do so, would be to enable the defendant to perpetrate a fraud.
Besides the plaintiff and the defendant there are available two neutraland independent witnesses who are in a position to state why, and thecircumstances under which P54 came to be executed not in favour of theplaintiff, but of the defendant. One of them has given evidence,- namely,Abdul Bahiman. The other is Mr. Ameen, the notary, who must havebeen interviewed by and instructed by the partiest before he drafted thedocuments. No question of professional privilege arises in this case,'because the three parties involved have given evidence, and AbdulBahiman could have had no possible objection to the notary being-called. This is one example how in this ease,, one side or the other,'by failing to call a material witness in regard to matters on which theyare in dispute, have rendered difficult the task of the Court in deciding’the complicated questions of fact which arise in this case. The learned’District Judge on this question whether P54 created a trust held “I
1 (1947) 48 N. L. R. 289 (Privy Council).
find that the defendant had no money of his own to purchase the propertydescribed in the plaint, and that it was bought with funds belonging tottie plaintiff for the price of Rs. 120,000 ”.
Abdul Bahiman’s evidence has been accepted by the District Judge.In June, 1945, when plaintiff interviewed Abdul Rahim an in India, the■defendant and the plaintiff had not fallen out. According to the plaintiff,they had “ looked into accounts in March, 1945 ” when the clerk John wasengaged. According to the defendant accounts up to March 31, 1945,were looked into in May, 1945. Thereafter, their relationship continueduntil November 9, 1945, when the plaintiff’s contracts with the Servicesterminated. The parties fell out about that period, that is to say afterOctober 19, when deed P54 was executed. In fact, there is forcein Mr. H. V. Perera’s contention that, once the defendant had obtainedpossession of the deed P54 in his name and obtained title to the lands,his attitude towards the plaintiff changed, and led to the animosity andsquabbles which developed thereafter. In spite of Mr. Hayley’s powerfulargument, I am of opinion that when all the facts and circumstances areviewed as a whole, the conclusion is irresistible that it was the plaintiffand not the defendant who wanted to acquire these lands. Why thedeed P54 was eventually executed in the name of the defendant maybe due to various reasons. One which comes to mind is that should theplaintiff be sued and judgment obtained against him, these propertieswould not, it may have been hoped, be liable to seizure under the writ ofa judgment creditor of the plaintiff. At this date plaintiff trusted .thedefendant, and that is the reason which he gave to Abdul Rahiman whenthe latter wanted to know why P54 was being executed in favour of thedefendant.
On the facts as found by the learned District Judge, this transactioncomes within the provisions of s. 84 of the Trusts Ordinance: “ Whereproperty is transferred to One person for a consideration paid or providedby another person, and it appears that such other person did not intendto pay or provide such consideration for the benefit of the transfereethe transferee must hold the property for the benefit of the person payingbr providing the consideration ’’—see Ranasinghe v. Fernando *, Wijey-tilaha v. Ranasinghe2, Sangarapillai v. Kandiah3. The evidence demon-strates that at; the date P54 was executed both the plaintiff and the defen-dant were in accord that the defendant had in his possession more thanRs. 120,000 which had been entrusted to the defendant by the plaintiff.The latter wanted to. buy the land in question out of that money, but forsome reason, acquiesced in by both parties, the actual transfer' was madein favour of the defendant, it being understood that, in due course, thedefendant would execute a transfer of it in favour of the plaintiff. Itis to be noted that a transfer of land by a trustee to the person bene-ficially interested is liable to a stamp duty of only Rs. 10 under item 23 (4)of the schedule to the Stamp Ordinance- It was open to the defendant,when he realized that the plaintiff was not calling Mr. Ameen, to havecalled that witness himself, but he failed to do so. furthermore,
there is the clear evidence, of Abdul Rahiman who swore:‘ ‘The deed
(1916) 19 JV. L. B. 344.
' .< … . 1
(P54) was explained to me. I saw it was in favour of the defendant.X said * My agreement was with plaintiff ’. I asked what. the matterwas? Plaintiff replied. He said he had a business, and it was impossiblefor him to get the transfer in his name, and he would get a deed' from thedefendant who was his father-in-law’s brother. The defendant -was therethen. Defendant said nothing. X had no prior dealings with the defen-dant That evidence, if true, .amounts to an admission by the defen-dant that what the plaintiff told Abdul Rahim an Saibo is true. Thereis no reason why Abdul Rahim an Saibo should state what is untrue.The defendant’s evidence is entirely different. His story is that AbdulRahiman Saibo ** came and asked* me to deposit the money (in D. C.,,Kandy, 1,349/L) and take over the properties -before instituting action….. I agreed to buy those properties for Rs. 90,000 from Abdul
Rahiman … I sent the plaintiff to India to fix up the final value ofthe property with Abdul Rahiman Saibo, and the plaintiff paid himRs. 2,000 on that occasion. I did not pay for the property with plaintiff’smoney”. It is to be observed that this story was not put to AbdulRahiman Saibo when he was cross-examined by the defendant.
The exhibit P69 shows that defendant was substituted as a plaintiff in
C., Kandy, 1,349/L on January 29, 1946. On September 5, 1945, theplaintiff (Abdul Rahiman Saibo) moved to deposit R3. 60,000 to thecredit of the case. Before the money was actually deposited, on October22, 1945. This defendant appearing by his proctor, Mr- Ameen, movedto be substitutedor added asa party plaintiff.He alsomoved for a
deposit order forRs. 60,000.That money wasactuallydeposited on
October 22, 1945 (see journal entry showing that Kacheheri ReceiptXo. 1361 /Y5 for that sum had been filed of record). On January 29, 1946,the defendant was added as 2nd plaintiff to that action On October16, 1946, the ease was settled and the terms of settlement P70 was filed.On the following day the defendant deposited a sum of Rs. 50,000 inCourt. Decree was entered on October 23, 1946, and on the same daytwo sums of Rs. 8,000 and Rs. 102,000 were drawn out of Court. OnXovember 6, 1947, the Secretary of the District Court executed the deedof transfer P55 for the premisesin favour of th’s defendant.«
The defendant’sstory is thathe made the firstdeposit of Rs. 60,000
from his own cash which he had in his house, and that the second depositof Rs. 50,000 was made up from rents derived from boutiques belongingto his brother, and from cash. The learned District Judge has disbelievedthe defendant s story particularly as there was no independent evidenceto support it. He holds that the defendant had no money of his own topurchase this property, and that the money utilized was that of theplaintiff which he held in trust for the plaintiff. It is impossible to saythat the learned Judge has reached an erroneous conclusion.
The rights of parties to an action are determined as at the date of theaction—Silva v. Fernando de Silva v. GoonetileJce2, de Silva v. Edirisuriya3.Ordinarily, an action is instituted on the date the.plaint has been filed andaccepted by the Court. The present action wJs instituted on November 8,
{1912) 15 N. _£r. 22. 199 (Privy Council).{1931) 32 N. Ij. R. at -p. 219 {Four Judges).{1940) 41 N. L. 22. at p. 463.
1946. At that date this defendant had no legal title to the propertyin question. His rights under deed P54 was an incorporeal right or aohose in- action. He obtained title under the conveyance P55 on November6, 1947, i.e., nearly one year after the present action had been instituted.This point was not raised by the defendant either at the trial or at theargument in appeal.
The terms of settlement P70 is dated October 16, 1946, i.e., beforethe present action was filed. Paragraph „1 of P70 says that when certainthings were done, the added plaintiff (the defendant) will be declaredentitled to the premises …. and the defendants (i.e., Karuppiah)will execute a transfer in favour of *added-plainbiff when he submits adraft deed for the signature of the defendants. Paragraph 17 of P70states that this defendant was to be given possession on November 1,1946. The defendant admitted that he is in possession. Decree wasentered in accordance with these terms of settlements on October 23.1946. I am, therefore, of opinion that although the defendant had notobtained the formal deed P55 in his favour at the date this action wasfiled, he nevertheless both under the terms of settlement P 70 and under thedecree was vested with legal rights as owner of the premises in question—see Fernando v. Coomaraswamy1, In- re Alim2. Therefore at the date thepresent action was filed—namely, on November 8, 1946, the defendanthad rights in the lands in question. He cannot deny and has not attempt-ed to deny that he had such rights. Plaintiff’s claim, therefore, is wellfounded. I agree with the learned District Judge that the defendantholds these lands in trust for the plaintiff.
The rest of the case involves questions of fact. As pointed out by theDistrict Judge, the main dispute centres round the question whetherbesides making advances by cheque in order to finance the plaintiff’sbusiness, the defendant had made cash disbersements to the value ofTts- 187,545, which sum the plaintiff denies.
[His Lordship then discussed the evidence, and continued : ]
The learned District Judge on a review of the whole case found on thefacts against the defendant. Can a Court of Appeal say that the trialJudge has reached a wrong conclusion? When a case comes up in appeal,the burden lies on the appellant to show that the judgment appealed from iswrong. If all he can show is nicely balanced calculations which lead tothe equal possibility of judgment on either the one side or the other beingright, he cannot be said to have succeeded—Suppramainai Chettiar v.Samidaranayarjarn3. In Ebrahim Lebbe Marikar v- Arulappapillai 4 thePrivy' Council said “ The District Judge had the great advantage ofhearing the evidence of these two witnesses at first hand and of observingtheir demeanour in the witness box. Having done so he unhesitatinglyaccepted the evidence of Phillips in preference to that of theappellant wnom he was unable to regard as a witness of truth. In.these circumstances, it would be quite impossible for their Lordshipsre differ from the conclusion^ at which he arrived, even if …. they
felt inclined so to do on an examination of the printed evidence before
1 (1940) 41 N. L. R. 466.-3 (1947) 48 N. L. R. at p. 161.
* (1921) 3 O. L. Rex. 5.4 (1939) 18 O. L. R. 209.
203
them”'—see also Naba Ki shore Mandal v. Upendra Kishore Menddl1,Powell v. Streatham Manor Nursing Home 2. It is no doubt correct thatthe appellate Court in cases tried by a Judge without a jury is free toreverse the conclusions of the trial Judge if the reasons for his judgmentare unsatisfactory—Watt v. Thomas3—but this should be done in therarest cases and when the appellate Court is convinced by the plainestconsiderations that it is justified in holding that the trial Judge hasformed a wrong conclusion—Yuill v. Yuill*. These principles have longbeen followed in our Courts—see R. v. Charles5 and Perera. v. Peiris6 -Xot only do I feel that the judgment appealed from cannot be upseton a pure question of fact, but the more the facts are considered thestronger is the conviction that the plaintiff’s claim is a just one, and thatthe defendant’s story is false. Having regard to who the defendant is,it is incredible that he should have made large cash advances on plaintiff’saccount without obtaining a single receipt. The witnesses he called toprove that he made such cash payments gave such improbable evidencethat it is not surprising that the trial Judge rejected their evidence. Thecriticisms of the Judge regarding the book DIO produced by the defendantare justified. The rejection of DIO also involves the rejection of theextract D30E. The claim of the defendant for a sum of Ps. 98,500 fortransport, loading and payments to suppliers of timber, &c., is based onno proof beyond the ipse dixit of the defendant. The interpolation madein the book D115 produced by the witness Suppramaniam, and thevery improbable story told by the witness Siripina about the two post-cards D125 and D126 lead to more than a suspicion that the defendanthad been fabricating false evidence to support his case.
Therefore, the finding of the learned District Judge that the evidencehas failed to establish that the defendant made cash payments on accountof the plaintiff in addition to his payments by cheque is justified. Thecounsel for the defendant produced the statement D178 showing thefinancial position according to the respective cases of the plaintiff and the-defendant. Counsel for the plaintiff in his address at the close of the casehas relied on D178. Therefore the learned Judge was justified in actingon that statement. I see no reason to disturb the findings of the DistrictJudge on the figures he has arrived at.
Plaintiff has filed a cross appeal. He submits that the decree enteredin this case should be varied by ordering the defendant to convey anddeliver possession of the Nawalapitiya property to the pfaintiff. Therewas a prayer to this effect in the plaint. X hold that the decree shouldbe amended accordingly. Subject to this variation, the judgment anddecree appealed against should be affirmed with costs
I greatly regret the delay which has occurred, in delivering thisjudgment. This was due to causes entirely beyond our control, parti-cularly as I had to leave for Jaffna on circuit immediately after theargument of this appeal was concluded.-
Otjxasekera J. agreed in a separate judgment.
Appeal dismissed.-
(1945) P. 15.
(1907) A. C. R. 125.
(1946) 47 N. L. R. at p. 59
(1922) A. I. B. P. C. at p. 40.(1935) A. C. 243.
(1947) A. C. 484.
»