MURIEL COORAY and others, Appellants, and B. NARAINDAS and others, Responden

033-NLR-NLR-V-73-MURIEL-COORAY-and-others-Appellants-and-B.-NARAINDAS-and-others-Responden.pdf


Cooray i>. Naraindas
U5
1969 Present:H. N. G. Fernando, C.J., and de Kretser, J.MURIEL COORAY and others. Appellants, and B. NARAINDAS andothers. Respondents
S.C. 52616-5 (F) and 52SJ65 {F)—D. C. Colombo, 9970/L
Fidcicotntnissum by deed—Designation of donee's children as fideicommissaries upondonee’s death—Prohibition against alienation and seizure for donee’s debts—Condition that upon seizure for debt the property should revert to donee’s “ otherheirs ”—Effect of such seizure—Meaning of expression " other heirs "—Matrimonial Rights and Inheritance Ordinance {Cap. 57), ss. 21, 25.
The land in dispute was gifted to B in 1902 by his mother. The gift wassubjoct to a fidoicommissura in favour of B's children or remoter issue, to takeoffoct upon B’s death. It contained a prohibition against voluntary alienationand against soizure for any of B’s debts and provided that in the evont of itsbeing alienated or seized the land should revert to B’s other heirs and “ the saiddonco shall thereby lose all benefit of the said premises haroby gifted
On September 25, 1925, the land was soized by the Fiscal in execution of adorreo ontcrcd against B in respect of a debt and was subsequently convoyedby tho Fiscal on February 9, 1926, to a sister of B, who was the purchaser attho execution salo. The plaintiffs in tho presont action claimod title undera deed of 1901 by which tho sistor purported to sell tho whole land to them.
B died in 1959, unmarried and issueloss, so that- the gift-over to his childrencould not take effect.
Held, that, in terms of tho deed of 1902, the land rovorted to B’s “ other heirs ”upon its soizure in execution of the decree against B. The term “ other heirs ”in its context meant tho hoirs of B other than his children or remoter issue.Tho expression “ hoirs ” can havo a meaning although used with reference toporsons who aro elivo. Tho condition conveying the land to B’s issuo afterhis doatli wns distinct from'and uncontrolled by the second condition rolating totho porsons who should benefit in the event of seizure in execution of a decreeagainst him.
Am: AL from a judgment of the District Court, Colombo.
In S.C. 526/65—
Ranganathan, Q.C., with D. ]V. Ediriiueera and F. C. Perera, for the1st defendant-appellant.
Ranganathan, Q.C., with C. Chellappah, Edgar Cooray and C.Sandarasagara, for the 2nd, 3rd, 4th, 6th, 7th and Sth defendants-respondents.
In S.C. 528/65—
C. Ranganathan, Q.C., with C. Chellappah, Edgar Cooray andC. Sandarasagara, for the 3rd, 4th, Sth, 11th, 13th and 14th defendants-appollanls.
Lxxm—7, 8 & 9
1*—J 15020—2,256(7/70)*
146
H. X. G. FERXAXDO, C.J.—Cooray v. FaraiivJas
; C. Ranganathan, Q.C., with D. IF. Edirineera and F. C. Perern, for the1st defendant-respondent.
r 2nd defendant-appellant appeared in person in S.C. 528/65 and for the1st defendant-respondent in S.C. 526/65.
H. IF. Jayeuardene, Q.C., with S. Sharvananda, O. M. S. Samaraweeraand Neville de Alicis, for the plaintiffs-respondents in both appeals.
Cur. adv. vult.
October 21, 1969. H. N. G. Fernando, C.J.—
The decision of this case turns principally on the construction to beplaced on certain conditions in a deed of gift, P6 of 1902, by which theformer owner of the land in dispute gifted the land to her son Benjamin.The conditions were in the following terms :—
“That the said Donee shall hot sell mortgage or otherwise alienateor encumber the said premises buildings, or plantations or any part orshare thereof but he shall only hold and occupy the said premisesbuildings and plantations and enjoy the rents income and profits thereofduring his life time and on his death the said premises together with thebuildings and plantations should devolve on his children or remoterissue as their absolute property nor the said premises buildings andplantations or any part thereof should be liable to be seized or soldfor any of his debts or defaults and.it is hereby provided that in theevent of the said premises buildings or plantations being alienated orseized then and in such case the said premises buildings and plantationsshould revert to his other heirs and the said Donee shall thereby loseall benefit of the said premises buildings and plantations herebygifted.”.
It is common ground that the first condition (ending with the words“ as their absolute property ”) created an express jideicommissum infavour of the children of Benjamin, to take effect upon his death. Itis also common ground that any breach of the prohibition against aliena-tion which was imposed in the first sentence of the condition would nothave had the effect of advancing the time at which the property wouldpass to the children of Benjamin. In the event, Benjamin died in 1959,unmarried and issueless, so that the gift-over to his children has not takeneffect.
The land in dispute was seized on September 25, 1925, in execution of 'a Writ issued in D.C. Colombo No. 12977 for the seizure and sale of theproperty of Benjamin. At the subsequent sale in execution, the land waspurchased by one Mrs. Annie Peiris, in whose favour the Fiscal executeda deed P7 of 9th February 1926, conveying to her all the right title andinterest of Benjamin in the land. The plaintiffs now claim title undera deed P16 of 1961, by which Annie Peiris purported'to sell the.land tothem. „ – ' '■-
H. NT. G. FEBN'AN'DO, C.J.—Cooray v. Naraindas
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The principal contention for the defendants in this case lias been thattho Fiscal s’s conveyance of 1926 was void and inoperative, on the groundthat upon the seizure of the land in 1925 the second condition in the deedPG of 1902 had tho effect of vesting Benjamin’s right title and interestin the persons designated in the condition as Benjamin’s “ other heirsThe second condition being thus of vital importance, it is convenient toreproduce onco more tho terms of this condition, (while bearing in mindalso that the first sentenco of the first condition imposed on Benjamin aclear prohibition against any voluntar}- alienation):—
“ x x x x x x nor the said premises buildings and plantations or anypart thereof should be liable to be seized or sold for any of his debts ordefaults and it is hereby provided that in the event of the said premisesbuildings or plantations being alienated or seized then and in such easetho said premises buildings and plantations should revert to his otherheirs and the said Donee shall thereby lose all benefit of the saidpremises buildings and plantations thereby gifted. ”
Tho learned District Judge rejected the contention of the defendantsfor reasons which were thus stated in his judgment
“ The party who shall I030 all benefit is clearly designated as thoDonee, Benjamin, himself. No other party is brought under thisdisqualification and specifically mentioned that they would lose allbenefit like tho Donee, Benjamin. The children or remoter descendantsarc not mentioned as a group that would lose all benefit along withtheir father, the donee. I do not think, therefore, that tho term ‘otherheirs ’ means heirs other than tho children or remoter issue. If infact it was the intention of the Donor to cut off the children andremoter issue completely in the event of seizure or sale it could easilyhave been mentioned specifically in the way it was provided that the‘ Donee shall lose all benefit ’. The absence of any such specificprovision excluding the children would show that in any event thechildren were not excluded. Even assuming that tho Donor wascontemplating some distinction between the various classes of heirs shehad not succeeded in designating them clearly. The term * otherheirs ’, in my view means nothing in the circumstances of this case.
In this view that I have taken I find that that part of the deed conveysno meaning and one must proceed, therefore, on the basis that thoprovisions in this deed arising out of the second set of circumstancesdo not exist. "
Counsel appearing for the plaintiffs in appeal sought supportin certain English judgments for the argument that the secondcondition was void for uncertainty. He cited in this connection thedecisions in Clayton v.Ramsden 1 and in Sifton v. S if ton-. It sufficesto point out that the conclusion as to the uncertainty of the forfeitureclause in each of these cases depended on tho fact that the clause‘ 11013) 1 A. E. R. 16.1 {103S) 3 A. E. R. 133.
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H. N. G. FERNANDO, C.J.—Cooray v. Xaraindas
did not set out with sufficient certainty tho event or the fact, the occur-rence of which would entail a forfeiture. The ratio decidendi of thesecases, in their relevance in the instant case, is that Benjamin must not beheld to have forfeited his interests in this land, unless the deed in hisfavour clearly defined the fact or event upon the occurrence of which hewould incur that forfeiture. But the fact or event was uncompromi-singly stated in the deed of gift to Benjamin, namely the event of theland " being alienated or seized It should have been perfectly clearto Benjamin and to anjrono who read the deed that-, in terms of the deed,the land would revert to his “ other heirs ”, upon its seizure in executionof a decree against him.
I should observe in passing that Counsel appearing in appeal on bothsides at first appeared to favour the construction that, if the second condi-tion as to the forfeiture was in law effective and becamo in fact operative,the first condition imposing a jidcicommissum in favour of Benjamin’schildren would be thereby defeated. I am very nearly certain howeverthat observations which fell from the Bench persuaded Counsel of theerror of that construction. The first condition created in simple wordsan express fideicommissmn in favour of Benjamin’s children. Thatright of the children could only have been defeated by some furthercondition which provided expressly or by necessary implication that theproperty will not in some specified event pass to the children on Benjamin’sdeath. But the second condition is not in any way inconsistent with theright of the children to take the property ultimately. The provisionthat the property should “ revert ” to Benjamin’s “ other heirs ” hasto be read together with the final clause that " the said donee shallthereby lose all benefit of the said premises hereby gifted ”. Theexpress reference to the loss of benefit by Benjamin, when consideredtogether with the absence of any reference to the loss of benefit by hischildren, fortifies the conclusion that the operation of the secondcondition would not defeat tho gift-over to the children which is containedin the first condition. Assuming therefore that the second conditiondid become operative, what reverted to Benjamin’s other heirs wasBenjamin’s right as fiduciary, subject to the gift-over to his children onhis death.
The learned trial Judge himself realized that a breach of the secondcondition could not operate to “ cut off” the children and remoter issueof Benjamin ; but this very point led him to tho opinion that the conditionwas uncertain. The error I think flowed from the failure to realize thatthe first condition, conveying the land to Benjamin’s issue after his death,was distinct from and uncontrolled by the second condition. Just asmuch as a breach of the second condition could not deprive the issue ofthe right ealier conveyed, so also such a breach could not confer on theissue any additional benefit during Benjamin’s life-time. This latterpurpose was clearly achieved by a designation which would exclude theissue from taking under the second condition.
H. N. G. FERNANDO. C.J.—Cooray v. Naraindas
M9
The persons designated in the second condition as the reversionersare Benjamin’s " other heirs It i3 in my opinion important to notethat this reference to the other heirs occurs in the paragraph which con-tains the gift-over to Benjamin’s “ children or remoter issue ” ; the veryproximity of the references, the first to Benjamin’s issue, and the secondto his other heirs, assists in the understanding of the meaning ofthe term “ other heirs Indeed, Counsel appearing for the plaintiffs inappeal conceded, I think quite properly, that in this context ** otherheirs ” must mean heirs of Benjamin, not being his children or remoterissue. The learned Judge in my opinion fell into error when he thoughtthat the children were not excluded from taking Benjamin’s fiduciaryinterest in the event of a breach of the second condition.
In the case of Selembrain v. Perumal1 the Court considered the effectof a condition that the property bequeathed by a testator “ shall bealways held and possessed by them (tho donee) and their heirs inperpetuity under the bond of Jideicommissum. The construction placedon this bequest was that a fdeicommissv m was created in favour of thepersons who, under the law of Intestate Succession, would be entitled tosucceed to the property of the donees. The Court in this case approveda similar construction of tho term “ heirs ” which had been adopted inthe earlier case of Paterson v. Silva s. The concept that the expression“ heirs ”, even when occurring in a statute, can have a meaningalthough used with reference to a person who is alive, was approved inthe case of Ponniah v. Kandiah 3.
Had therefore the donor in the deed PG provided in the second conditionthat the property if seized will revert to Benjamin's heirs, the conditionwould not haveTbcen void on the ground that the persons to benefit undertho condition were not designated with certainty. The meaning whichwould have then to be given to the condition is that tho property wouldpass to those persons who would have been Benjamin’s intestate heirs, ifhe were to have died at the time of the seizure of the property. The factthat there could not have been fore knowledge, at tho time of theexecution of PG, of the identity of the persons who would actually takeat the time of a breach of the second condition, would not have been aground for holding that there was any lack of certainty in the designationof the persons who would thereby be entitled to take the interest ofBenjamin. Docs then the fact that there was not a designation of heirssimpliciter, but instead a designation of "other heirs”, give rise touncertainty ? As I have already observed, the plain meaning of thisexpression in this context is " heirs other than issue ”, so that tho personsdesignated are no less certainly designated than they would be in a easeof a reference simply to “ heirs ”.
Counsel for the plaint id's in appeal has however presented an argumentwhich was not taken into account in tho judgment of the learned trialJudge. This argument depends upon tho reasoning, with which I agree,
1 (191-3) m N. L. It. G.* (1SS7) 0 S. O. C. 33.
J (1930) 21 -V. L. R. 337.
J 15020 17/70)
150
H. X. C. FEItXAXDO, C.J.—Cooray v. Xarain'ias
that in deciding whether “ other heirs ” is a designation which has a clearmeaning, the event of Benjamin having children but no wife at the timeof a seizure of the land must be taken into consideration. In that event,argued Counsel, the children would be Benjamin’s heirs by virtue of s. 24of the Matrimonial Rights and Inheritance Ordinance (Cap. 157), inpreference to all persons, and it must follow that in law such otherpersons will not be heirs qualified to succeed to Benjamin’s rights. Inthe event contemplated, therefore, the designation “ other heirs ” woulddenote neither the children nor other persons, and would thus bo withoutmeaning.
This argument is founded on an assumption that the preferent rightaccorded to children by the Ordinance must be inflexibly recognised inevery case. The unsoundness of this assumption is I think easilydemonstrable.
Let me assume that a parent makes a Will, in which ho merely declaresthat his children shall not inherit any of his property. In such a case, theWill will be operative to disinherit the Testator’s children; but because ofthe absence of any testamentary disposition, the property will pass as oilan intestacy in accordance with the provisions of Cap. 57. Assumingthen that the testator leaves no widow surviving him, the first provisionof the Ordinance apparently applicable will be section 24, and I can seeno reason why that section will then not operate to pass the property tothe testator’s grand-children if any ; and if there are no grand-children orremoter descendants, it seems clear that the property will pass under s. 25 'on the basis “ the children and remoter descendants failing ”. Itappears therefore that in this hypothetical case the circumstance ofthe disinherison of the testator’s children is a matter which is coveredby the words “ the children failing ” which occur in s. 24.
Let me also assume a different but more likely case ; that of a Will inwhich a testator bequeaths specific properties to each of his children, andthen directs that all his residuary property shall devolve on his “ otherheirs In such a case also, I can see no difficulty in the way of aconclusion that the residuary property will pass in accordance withs. 25,or with one or other of the succeeding provisions of Chapter 57, on theiasis that the terms of the Will have the effect that in relation to thegasiduary property “ the children fail ”. I
I have in mind in this connection Counsel’s argument that the specialrules, which apply to the construction of the intention of a testator in aWill, do not apply to the construction of a deecj[ inter vivos. But I cannotagree that the conclusions which are to be reached in the hypotheticalcases just discussed are in any way influenced by any special considera- .tions appficable to the construction of Wills. These conclusions dependoatirely on the plain meaning of a testator’s directions, and on theapplication of the relevant statutory provisions. I am unable to perceiveany distinction which can fairly be drawn between the second of thesehypothetical eases and- the condition which we have to construe in the
H. X. C. FERX.AXDO, C.J.—Cooray r. Karaindtu
151
instant case. Because "other heirs” bears in the present context theplain meaning " heirs not being children ”, the effect of the designationis that “ the children fail
In the ease of Francis Assisi v. Tampoe1 there was a condition in adeed of gift to X which prohibited X from alienating the property andprovided that after the death of X the property "shall devolve uponher children or lawful heirs”. The claim that this condition created aJideicommissum was resisted on the ground that the phrase “ children orlawful heirs ” pointed to two possible sets of beneficiaries, and that it wastherefore uncertain which of the two sets was designated. The Courtreached without difficulty the conclusion that the word “ or ” in thiscontext was used in a substitutional sense, so that the designation wasequivalent to the designation “ children or ivhom failing the lawful heirsThis construction of a deed inter vivos is of assistance in the present case ;firstly, in that it lays emphasis on the need for a Court to ascertain themeaning, in the context of a deed, of a term employed in order todesignate the persons entitled to a benefit tinder the deed ; again, it willbe seen that the Court here read into the phrase the words “ childrenfailing ” and thus found its true meaning.
I am satisfied on the grounds which have been stated that the secondcondition was not micertaiu, in its references, either to the event which itmentioned, or to the persons to whom the interest conveyed to Benjaminby the deed would pass on the occurrence of the event.
It was shown by the evidence that at the time of the seizure of thisproperty in 1925 there were living two sisters of Benjamin, one of whomwas Aiuiic Peiris who purchased the property at the subsequent sale ofexecution, and a brother Edward. Benjamin had another brotherJoseph, the father of the 1st and 3rd defendants in this ease ; but there isno proof either that Joseph was dead at the time of the seizure of the land,or that ho died intestate. There is therefore some uncertainty as towhether it was Joseph or else his children who succeeded to a share. Butupon the available evidence it is at least certain that Annie Peiris, thevendor to the present plaintiffs was one of tlio “ other heirs ” and becameentitled to a 1/4 share of Benjamin’s interest upon the seizure of this land.That interest was at that time subject to a Jideicommissum in favour ofBenjamin’s then unborn children, but that fideicommissvm ultimatelylapsed on Benjamin’s dcatli in 19o9 because he died without issue. Thatbeing so, Annie Peiris became entitled on the dcatli of Benjamin to a 1 /4share of the land free of any restriction*, and that 1/4 share passed to theplaintiffs under the deed PIG of 1901.
As lias already been stated, the learned District Judge held that tliosecond condition in the deed PC was void for uncertainty and thataccordingly Annie Peiris became entitled on the Fiscal’s conveyance P7to the entirety of Benjamin's interests. The 1st and 3rd defendantshowever contended at the trial that even if Annie Peiris became entitled1 {1950) 61 A*. L. n. 73.
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H. X. G. FERNANDO. C.J.—Coora./ r. Xaiaim/as
to the entirety of those interests, (hey nevertheless passed again toBenjamin upon the deed PS of 1026 executed by Mrs. Annie Peiris infavour of Benjamin. In this deed PS again, there was a condition that ifBenjamin’s interests were.seized in execution, those interests would revertto Sirs. Annie Peiris. In this connection, the contention for the plaintiffshas been that the condition for reversion to Annie Peiris did becomeoperative because the property was again seized in 1932 in execution of adecree against Benjamin.
The plaintiffs were unable to adduce documentary proof of thisseizure ; but they were able to prove both that a Writ of Execution hadissued from the District Court of Colombo for the seizure and sale of theproperty of Benjamin, and also that Annie Peiris had written toBenjamin’s judgment-creditor a letter, of which P10 is a copy, statingthat the property had been seized on or about 17th May, 1932, andfurther stating that thereupon the rights of Benjamin have reverted toAnnie Peiris in terms of PS. ■ The plaintiffs also proved that the docu-ments in the office of the Fiscal concerning the action taken by the Fiscalupon receipt of the Writ of Execution in 1932 for the seizure and sale ofBenjamin’s property had been destroj'ed, and that the files both of thejudgment-creditor and his lawyers relating to the action against Benjaminhad been destroj’ed. In these circumstances, the learned District Judgereached a finding that the plaintiffs had established the seizure of thisproperty in 1932. Despite the arguments of Counsel for the defendants,and of the 2nd defendant who appeared in person in appeal, I am unableto say that the finding of the District Judge on this matter was erroneous.
I must hold therefore that if the Fiscal’s Conveyance P7 of 1926 waseffective to pass to Annie Peiris the entirety of the interests of Benjaminunder the deed of Gift P6 of 1902, those interests, although re-conveyedby her to Benjamin on P8, reverted to her in 1932. That being so, I musthold in agreement with the trial Judge that, if the second condition in thedeed PG of 1902 was ineffective, the plaintiffs now have an unfetteredtitle to the property.
The question of prescription was also the subject of dispute between theparties. On this question, the learned trial Judge has held in favour ofthe plaintiffs’ on the ground that after the purchase of the propertyby Annie Peiris at the Fiscal’s sale in 1926 she has been in exclusivepossession of the property. Apart from tho important point that thelearned Judge did not regard the dispute as being one between co-owners,there are in my opinion several circumstances which he failed to considerwhen he reached this finding. Although Annie Peiris purchased theproperty at the Fiscal’s sale in 1926, it is apparent that she did so only toassist her brother Benjamin and to prevent Benjamin’s interests frombeing acquired by some outsider. Between 1926 when Annie Peiris bythe deed P8 re-conveyed to Benjamin the interests which he had formerlyheld, and 1932 when the property was seized against Benjamin, it wasBenjamin who must be presumed to have had possession, and that on hisown account. It can at best only be claimed for Annie Peiris that she
EC. N. G. FERNANDO, C.J.—Cooray v. Naraindos
153
had exclusive possession from and after Slay 1932, when apparentlyBenjamin’s creditors refrained from any further attempt to have Ben-jamin’s interests sold in execution. But in May 1933 Sirs. Annie Peirisjoined with hef sister and brother, and the widow of her brother Joseph,in executing a lease of the land for a ten-year period. According to theevideneo, this lease would have expired in 1943, but the lessee continuedto be tho tenant of the land until 1955 on terms identical with thosespecified in the lease. Tire evidence of the lessee establishes that dieherself for these 22 years recognised all tho lessors as her landlord. Therent due from the lessee was paid during the whole period, not to AnniePeiris, but to an Agency Firm which at the time of the execution of tholease in 1933 was authorised by all the lessors to receive rent. There wasno evidence cither from Annie Peiris herself, or from the Agency Firm, tothe effect tliat the rents paid by the lessee were in fact exclusivelyappropriated by Annie Peiris. But even if such evidence had beenavailable, I much doubt whether it would have sufficed to found a pleaby her of prescriptive title to this property. Of course if Mrs. Peiris. became fully entitled to all Benjamin’s interests by virtue of the Fiscal’sConvcyanco of 1926, there was no need for her to rely on the plea ofprescription. But if, as I have earlier concluded, Benjamin's interestspassed in 1925 to his brothers and sisters and/or the heirs of any deceasedbrother, then Mrs. Peiris was only a co-owner.
The explanation of Annie Peiris for the fact that her sister, her brotherEdward and the widow of her deceased brother Josejih, joined as lessorsin executing the lease 1D1 of 1933, although it found acceptance by thelearned trial Judge, was slender indeed. Her explanation was thatbecause the lessee proposed to develop tho land by the erection of sub-stantial buildings, she was anxious to make sure that the other partieswho joined ns lessors, and who would ultimately be her own heirs, shouldnot raiso difficulties after her death in regard to buildings erected by thelessee. This explanation found no support whatsoever in tho evidence ofthe lessee. The fact that the other parties joined in the lease is in theoircumstances capable only of one explanation, namely that Mrs. Peirisacknowledged the rights of those other parties, including the rights of theminor children of her brother Joseph, in this property. Whatever secretintent ion or motive Annie Peiri may have entertained, she did not professto have informed the other parties who joined as lessors that they werebeing joined on any ground oilier <2ian the ground that they were entitledto interests in the property. In these circumstances, the finding of thelearned trial Jiulg • that Annie Peiris acquired a title by prescriptioncamiot jjossibly be sustained. I
I have dealt with the question whether Benjamin’s interests passed6oIcly to hire. Peiris and thereafter to the plaintiffs, only on the suppositionthat the second condition in the deed PG of 1902 was void for uncertainty.But if, as I have already held, that condition was effective and becameoperative upon tho seizure of the property in September 1925, then theplaintiffs can claim only a declaration that they are entitled to a 1/4 share
154
The Queen v. Gnanasceha Thero and others
of the property. Although the claims of the 1st and 3rd defendants to bein possession either directly in their oira right, or as successors in title totheir father Joseph, has not been definitely established in this action, itis clear that on one or other such basis they do have a right of possessionas co-owners with the plaintiffs. That being so, they cannot now beejected from this property.
Tire decree appealed from is set aside. Decree will now be entereddeclaring the plaintiffs entitled to a 1/4 share of the property in dispute.The plaintiffs will pay to the appellants, other than the 2nd Defendant-Appellant, their costs in both Courts.
De Kbetseb, J.—I agree.
Decree set aside.