( 158 )
June 10 <t SIand
MUTTIAH v. CLEMENTS.D. C., Kandy, 12,380.
Entry into possession of land under promise of hose—Permanent improvementseffected by tenant—Subsequent lease by a landlord to a third party—Bightof former tenant to retain possession as against lessee until compensationwas paid.
Whore C entered into possession of a property (under a writtenpromise from the incumbent of a vihare, who held not attained hismajority, that he would be given a lease for ten years when the incum-bent came of age) paid rent in advance and materially improved it, andwhere a trustee appointed under the Buddhist Temporalities Ordinanceof 1889, which vested all temple lands in the lay trustees of the temple,leased to M the same lands for a term of ten years,—
Held, in an action brought by M against his lessor for failing to deliverpossession and against C for wrongfully withholding possession, that Chad a right to compensation for the permanent improvements effectedby him, and that he was entitled to retain possession until such com-pensation was paid.
Case reported in Bam., 1877, p. 157, questioned.
The right to compensation arises when one who is in possession of theproperty of another expends money on that property either on necessarymaintenance or improvements which permanently increase the value ofthe property.
The cost of erecting a factory on a tea estate and of clearing the teawhich had been overgrown by jungle should be compensated; but theperson in possession has no right to put on one side of the account theamount spent by him in growing and manufacturing tea and on the otherside his receipts, and deducting the latter from the former claim thebalance as necessary expenditure.
LAINTIFF (Muttiah) prayed that he may be declared entitledto the possession of a certain land known as Pendleton
estate, and that the defendant Clements be ejected therefrom.
It appeared that Pendleton estate was leased by the incumbentof the Degaldoruwa Vihare to Messrs. Walker and Dewar on the7th February, 1885, for a term of ten years; that they adbandonedit in. May, 1894; that Clements, who was employed on the estateby the lessees, agreed with the incumbent, who was then a minor,to work up the estate, and on obtaining a written promise on the18th December, 1894, that he would be given a lease for ten yearsas soon as the incumbent came of age, he entered into posses-sion paying Rs. 400 in advance as rent. He weeded that estateand cleared the roads, drains and boundaries, and manured thetea and kept in cultivation 60 acres. He also built a factory andfitted it with machinery.
( 159 )
On the 22nd August, 1896, Kiri Banda, who had been appointedtrustee of the vihare under the Buddhist Temporalities Ordinance,1889, sent to Clements a letter of demand claiming rent. In thefollowing month he visited the estate and promised to Clementsthat he would put the matter before the members of the ProvincialCommittee (elected under that Ordinance) and try and obtain forhim a lease. In November, 1897, the Secretary of the ProvincialCommittee wrote to him and asked whether he would offer betterterms than those offered to the Committee by another person. He(Clements) offered better terms, but they were not accepted.The trustee leased the land to the plaintiff, under the orders ofthe Committee in December, 1897, but as Clements refused tovacate the estate unless compensation were paid to him for all theimprovements he had made, plaintiff sued him and the trustee.They filed separate answers, but the District Judge after partlyhearing the case directed the defendant Kiri Banda (trustee) to bemade co-plaintiff, under section 18 of the Civil Procedure Code,inasmuch as the plaintiff and the trustee were acting togetheragainst the defendant Clements, and his claim to compensationcould be more easily decided in the present action without drivinghim to bring another suit.
After the trustee, Kiri Banda (first defendant), was made co-plaintiff the trial proceeded and the District Judge found asfollows: —
“ The total expenditure by defendant (Clements) to September.1898, was Its. 33,331 and the total income Rs. 26,298. The balancedeficit was Rs. 7,028. At the date of his entry the estate wasworth Rs. 100 per acre; after hdsl improvements it was worthRs. 250 per acre. He was a bond fide possessor, and not a tenant.The improvements effected by him, viz., building a factory, a setof lines and agricultural improvements were impensce utiles. “ Ifa mortage is to be treated as impensa utilis (as in Nicholas deSilva v. Shaik Ali, 1 N. L. R. 228), there is every, reason forholding that a factory must be treated as such. Following therules laid down in that case, I fix the compensation at Rs. 7,028,the balance of expenditure uncovered by the income.
“ The defendant (Clements) is not entitled to retain possessionas against the plaintiff lessee, until compensation is paid, if I amto follow the decision in D. C., Badulla, 20,137 (Ram. 1877, p. 157).But my ow'n opinion is that judgment should- be entered forplaintiff for possession, and for defendant for compensation, andthe plaintiff’s right to possession postponed until the compensationis paid.
June 19 <C Uand
( 160 )
June 19 <t Siand
“ As the plaintiff is entitled to immediate possession (followingthe Badulla case), 1 take it he is also entitled to damages, themeaning of which is, I think, the profits valued by the defendantfrom the date of the lease to tne plaintiff. Such profits amountto Bs. 117. The plaintiff is entitled to damages to that extent."
Defendant (Clements) appealed, as also did the trustee.
The two appeals were heard together.
Bawa (with him W. Pereira and Allan Driebery), for defendant.
Van Langenberg, for plaintiff.
Cur. adv. null.
The facts of the case may be shortly stated thus. An estateknown as the Pendleton estate was the property of a Buddhisttemple, and had been leased to two lessees by the incumbent ofthe temple for a term of ten years, which expired in February, 1895.
The lessees had planted 60 acres with tea, but finding that theventure did not pay abandoned it before the expiry of the lease.The defendant Clements, a Jaffna Tamil, owning a small teaestate in the neighbourhood, approached the incumbent with aview to getting a lease of this estate. On the 18th December,1894, the incumbent, in consideration of Bs. 400 paid by Clements,gave him a written promise to grant him a lease at the rate ofBs. 2 per annum an acre for the sixty acres of tea, the lease tocommence from February, 1895. The length of the lease was notspecified, but the lessee was to pay five years’ rent on its execution.The incumbent was then a minor, and was to give a formal leaseon attaining majority. Clements accordingly went into posses-sion, cleared the sixty acres of tea of the weeds which had over-grown it, and built a small tea factory, using for this purpose thematerials of an old coffee store which was on the land.
Unfortunately he was not aware of the change in the laweffected by the Buddhist Temporalities Ordinance of 1889, whichvested all temple lands in the lay trustees of temples, and providedthat no lease should be made by the trustees except with theapproval of the Provincial Committee. On the 22nd August,1896, the trustee made a formal claim for three years’ rent by aproctor’s letter of that date. On receiving that letter Clementssent for the trustee, who told him that he ought to pay rent tohim, and promised to put the matter before the Committee and lethim know whether he could have a lease. He seems to havetold Clements to go on cultivating the estate in the meantime.
Clements sent in a formal application to the Committee, and ashis application was not successful he wrote to the Committee theletters of the 20th September, 1897, 25th October, 1897, and 30th
( W1 )
November, 1897, which will be found in the record. For somereason or other the trustee and the Committee were unwilling tolease the premises to Clements, and ultimately by a lease datedthe 2l8t September, 1897, the premises were demised to theplaintiffs for a term of ten years on terms less favourable to thetrustee than those offered by Clements.
The lessees being unable to obtain possession commenced thisaction on the 16th May, 1898, against the trustee and Clements,alleging that the trustee had failed to put them in possession inaccordance with the lease, and that Clements was wrongfullywithholding possession and claiming relief.
Clements in his answer alleged that the defendant trustee andthe Committee, who were not parties to the action, had acquiescedin his occupation of the land, and had allowed him to spendmoney on it, and he claimed to .be entitled to a large sum by wayof compensation in respect of money expended by him in improv-ing the estate by building the factory and clearing the estate ofweeds. He also claimed the difference between the moneysexpended by him in the upkeep of the estate and the receipts,contending that the value of the estate had been permanentlyincreased to an amount exceeding the sum claimed.
The District Judge, when the case came on for trial, orderedthe defendant trustee to be made a plaintiff in spite of his protest,and to file a replication in order that the question might bedecided as between him and Clements. It was contended thatthis order was wrongly made. It purports to be made undersection 18 of the Civil Procedure Code, which provides that theCourt may order that any plaintiff may be made defendant, orany defendant may be made a plaintiff, or that the name of anyjperson who ought to have been joined whether as plaintiff ordefendant be added, and it was argued that the power is limitedby the proviso in the next following section that no person is tobe added as plaintiff without his consent.
It is unnecessary to decide this question, for the trustee did notappeal against the order. He filed a replication and accepted theposition, and I am of opinion that it is too late for him now totake the objection.
The District Judge gave judgment for the plaintiffs as againstClements for possession of the land, and awarding them Us. 117by way of damages, and ordered the added plaintiff as trustee ofthe temple to pay Clements Bs. 7,028 as “ compensation forimprovements.” He held that Clements was not entitled toretain possession of the land as against the lessees until thecompensation was paid, following a decision of this Court
9—RR 19790 (12/66)
June 19 & SIand
Auguet S9.Bonseb, C.J.
( 162 )
June 19 <f SIand
August S9.Bonber, C.J.
(:Rdmandthan, 1867, p. 187), of which, however, he did nobapprove, though it was binding on him. For my own part I donot understand how, if a person is entitled to compensation and toretain the property against the owner until paid, he can bedeprived of his right by the owner leasing the property to a thirdperson, or how such third person, who has taken a lease withnotice of the facts, can be in a better position than the ownerhimself.
The right to compensation arises when one who is in possessionof the property of another expends money on that property eitheron necessary maintenance or improvements which permanent-ly increase the value of the property. Now, as regards part of themoney expended by Clements, I am not prepared to allow it tobe necessary. I do not think that Clements is entitled to put onone side of the account the amounts spent by him in growing andmanufacturing tea and on the other side his receipts, and deduct-ing the latter from the former claim the balance as necessaryexpenditure. I fail to see on what principle the owner can bemade to bear the loss incurred in an unsuccessful agriculturalspeculation.
The evidence of Mr. Holloway as to the increase of value of theestate I reject entirely as being mere conjecture.
The permanent improvement by clearing the tea which hadbeen overgrown by jungle rests on a different footing. Clementssays that this cost him a rupee an acre tor five months. This onsixty acres would amount to Rs. 300. The cost of erecting thefactory, which was a permanent improvement, was Rs. 945.75,and he is entitled to that sum also. I am of opinion that theamount of compensation should be reduced to Es. 1,245.75, butthat no damages should be given to the plaintiffs, and that thedefendant Clements should be declared entitled to retain posses-sion until the compensation is paid. The defendant Clementswill have the costs of his appeal, and there will be no costs of thetrustee’s appeal.
I agree with the District Judge in thinking that the trustee hasbehaved badly in this matter, and 1 suspect the bond fides of thelease to the plaintiffs, for I find that one of the lessees states inhis evidence that his first visit to the land was when he went totake possession after the lease.
I hope that even now some arrangement will be made wherebyClements will get a lease of this estate, the plaintiffs surrenderingtheir lease.
Moncreiff, J.—I am of the some opinion.
MUTTIAH v. CLEMENTS