PERERA et al ,Appellants, and DE FONSEKA et al , Respondent

023-NLR-NLR-V-51-PERERA-et-al-Appellants-and-DE-FONSEKA-et-al-Respondent.pdf


WINDHAM J.—Perera v. de Fottseka
07
1949Present: Windham and Gratlaen JJ,PERERA et al., Appellants, and DE FONSEKAet al., Respondents
8. C. 426— D. C. Colombo, 2,0t3L
Fidei comraissura—Deed of gift inter vivos—Entail and Settlement Ordinance{Cap. 54)—Sections 4 and S—“ Exchange " of fidei oommissura pro*perky—Aleaning and offset of such exchange—Single and separate fideicommissa—Jusaccreecondi—Meaning of word" surviving
The “ oxehange 11 which is contemplated in sections 4 and 8 ofthe Entail and Settlement Ordinance is an exchange in tho sense of thesubstitution of one property for another. The properties may correctlybe said to have boen “ exchanged ” the one for the other, whothor ornot the former owner of the property which is received in exchangebecomes the new owner of the proporty which is given in exchange.
A fidei commissum created by deed of gift gave proporty to twosisters, L and A, as fiduciaries " in equal undivided sharos for over ”and imposed the condition that “ the said promisor shall after theirdeath devolve on their lawful issues respectively and in the event ofany one of the said donees dying without lawful ixsuo her share, rightand interest in the said premises shall devolve on and revert to thesurviving donee subject however to the conditions aforesaid * I, diedin 1935 leaving nine children. A died in 1941, intestate, without havinghad issue.
Held, that the deed of gift created u single fidei commissum in favourof L and A and their respective issues and that upon tho death of Awithout issue, her half share did not dovolve on her intestate heirs butshifted over by virtue of a jus aocrescmdi to the children of the alreadydeceased L. in accordance with the rule in TiBekeratne t>. Abeysckera(1897) 2 A'. L. R. 323.
Held, further, that the expression “ surviving donee ”, in tl*c context,should be construed as “ other domre ”.
^LppEAL from a judgment of tho District Court, Colombo.
B. Wikramanayake, K.C., with 1). S. Jayavnckrama, for 37th and39th added defendants, appellants.
H. V*. Perera, K.C., with B. E. Weerasooria, K.C., N. M. de Silvaand Ivor Misso, for plaintiff, respondent.
Cur. adv. vnlf.
October 13,1949. Windham J.—
This is an appeal from a judgment given in favour of the plaintiff-res-pondent, for the sale, under the Partition Ordinance, of certain premisesat No. 90, Baillie Street, Colombo, of which the plaintiff-respondent andthe first to eighth defendant-respondents claimed exclusive co-ownership.
The plaintiff-respondent traced title to the premises from as earlyas 1817, and it is uncontested that by a deed (P7) of 1893 they passedinto the ownership of one Mututantrige Simon Fernando, who was thegrandfather of the plaintiff-respondent and of the latter’s brothers andsisters the first to eighth defendant-respondents,
u
1J. -V. A 93667-1,040 (11/49)
06
WINDHAM J,—P*reru o. tie VoMth*
The points raised in this appeal, however, arise upon the terms of afidti cojnmmum contained In an earlier deed of gift of I86IJ,—P8—,whereby Siman Fernando and his wife Maria Fcrero, who were possessedof several other properties as well as that at No. 20, Baillie Street, giftedcertain premises at No. 21 (now No. 24) Chatham Street, Colombo,to two of their daughters, Leonora and Amolia, upon the following termsand conditions:—
To have and to hold the said premises with the easements rightsappurtenances thereunto belonging or used or onjoyorl thorowith orknown as part and parcel thereof unto them the said MututantrigoLeanora Fernando and Mututantrigo Amolia Fernando their heirsexecutors and administrators in equal undivided shares for ever subjecthowever to the conditions following that is to say, that t-hc saidMututantrige Siman Fernando shall during his life time be entitledto take use and appropriate to his own use the issues rents and profitsof the said premises and that after his death and in tho event of hiswife Cclombapatabondige Maria Perera surviving him, she shall duringher life timo be entitled to take use and appropriate to her own use ujust half of the said issues, rents and profits tho other half being takenused anil appropriated by the doners, to wit tho said MututantrigeLeonora Fernando and Mututantrigo Amelia Fernando and subjectalso to the conditions that the said donees Mututantrige LeonoraFernando and Mututantrige Amolia Fornando shall not nor shalleither of them be entitled to sell, mortgage, lease, for a longer termthan four years at a timo or otherwise encumber the said premises norshall the seme or the rente mid profits thereof be liable to be sold inexecution for tlteir debts or for the debts of any or either of them andthe said promises shall after their death devolve on their lawful issuesrespectively and in the event of any one of the said donees dyingwithout lawful issue her share, right and interest in the said premisesshall devolve on and revert to the surviving donee subject howeverto the conditions and restrictions aforesaid ”.
Before proceeding to consider the effect of the fuiei ammissum orfidti commiaaa which the above recited portions of the deed P8 admittedlycreated, it is necessary to recite what subsequently happened. In 1893,Siman Fernando and Ins wife made an application to the court under theEntail and Settlement. Ordinance, No. II of 1876 (now Cop. 54), to whichtheir daughloB Leonora and Amolia were parties, to sanction the transferof the premises at No. 21, Chatham Street, by Leonora and Amolia totheir brother (Simon's son) James Fernando, in consideration (or thet ransfer by Simon n«d his wife of No. 20, Baillie Street (the premises nowin dispute), to Amelia, and of premises No. 22, Baillie Street, to Leonora.This application was granted, mid the transfers were duly effected.By deed Pi 3 of 2nd March, 1894, No. 20, Baillie Street, was transferredto Amolia, and by deed 9D4 No. 22, Baillie Street, was on the some daytransferred to Leonora. Theso deeds, and the decrees of court upon whichthey were made, did not contain the same restrictions upon alienationand designation of beneficiaries os the deed P8 of 1883 had done, andthey contained m> corresponding gift over to the survivor in the eventof any one of the two sisters dying without issue.
WINDHAM J.—Ferera u, tl* b'onaakn
Leonora died a widow in 193fi, leaving nine children, namely theplaintiff-respondent and the first to eighth defendant*rospondents.Arnolia died In 1941, intestate, without having had issue, leaving as herholrs her husband (as to one half) and her brothovs and sisters (as to theother half). Her husband Dr. W. A. de Silva, died in 1942, leaving awill. The 37th, 38th and 39th added defendants, who ore the appellantsin this appeal, claim the premises at No. 20, Baillie Street, as the intestateheirs of Arnolia or as beneficiaries under the will of her husband.
Briefly, the appellants' olaim is based on the followingcontentions, First, it is contended that the devolution of the premisesat No. 20, .Baillie Street, is to be governed, hot by the terms of P8 whichhave been sot out above, but by the terms of the later deed P13 of 1894,whioh transferred those premises to Arnolia without any gift over toLeonora or the latter’s ohildren in the event of Arnolia dying withoutissue. Secondly it is contended that, evon if the torins of P8 are appli>cable, then in accordance with those terms, by reason of Amelia's havingdied issueles3 after the death of Leonora, Amelia's share devolved onher intestate heirs and was not subject to a gift over in favour of theissue of Leonora,
Now the transactions in March, 1894, whereby Arnolia and Leonoratransferred No. 21, Chatham Street, to their brother James Fernandoin consideration for the transfer by their parents of No. 20, Baillie Street,to Arnolia and No. 22, Baillie Street, to Leonora, purported to be made inpursuance of an application by their father Simau Fernando under theEntail and Settlement Ordinance, and the decrees consequent upon thegranting of that application by the District Court purported similarlyto Ik made under that Ordinance. If the transactions constituted an“ exchange ” of properties within the meaning of section 4 of tho Kntailand Settlement Ordinance (Cap. 54), then there can be no doubt thatNo. 20, Baillie Street, which was taken by Arnolia in oxchango for herhalf share in No. 21, Chatham Street, became subject to the same fideicotnmissum as the latter had been subject to under the deed P8, by opera-tion of the clear provisions of section 8 of the Ordinance, which providesthat—“ Any property taken in exchange for any property exchangedunder the provisions of this Ordinance shall become subject to the sameentail, fidei commis&um, or settlement as the property for which it wasgiven in exchange was subject to at the time of such exchange
That such would be the legal effect of section 8 notwithstandingthat the terms of the fidei commissum in the deed P8 were not embodiedin the deed PI3 (whereby 20, Baillie Street, was transferred to Arnolia)or in the decree to which P13 gave effect-, was laid down clearly inAbeyteardene v. Tyrdl1, where the precise point arose. That ease wasconcerned with a similar exchange of properties effected by this sameSi man Fernando and his wife in favour of two other daughters of theirs,to whom they had given a property .called “ The Priory ” subject to aJidei commissum similar in terms to that contained in the deed P8, whichwas later exchanged for a property called “ Srinivasa ” under a decreeand consequent deed of transfer which did not embody the terms of thatfidei commieeum.
1 (193$) 39 A*. Z. ft. M3.
100
WINDHAM J.—Perera v. de Fonttka
indeed the only feature which has licen argued to distinguish that casefrom the present one is that in that case Simon and his wife transferred“ Srinivasa ” to the two sisters, and the two sisters in return transferred“ The Priory *’ to Snnan and his wife, whereas in the present case theparties to the transfer of 20, Baillie Street, were not the same as theparties to the transfer of 21, Chatham Street. For 20, Baillie Street,was transferred by Sim&n and his wife to Amolia, while 2], ChathamStroot, war transferred by Arnolia not to Sim&n and his wife but to theirson (her brother) James Fernando. Such a transaction, it is argued,unlike that in the earlier case, cannot be deomod to be an “ exchange ”at all, with the result that the Entail and Settlement Ordinance, andsection 8 in partioular, do not apply. An " exchange ", it is contended,must involve two parties, no more and no less, and covers only the casewhere A transfers property to B, and B in return transfers property toA, (it being conceded that A and B might be the same person acting intwo different capacities). In support of this contention it is pointed out,with truth, that under the Roman Law an “ exchange " is a contract(permuiatio being one of the innominate contracts “ re ” according to theProoulean view adopted by Justinian), and that the " do ut dea " natureof suoh a oontract necessitates that if A gives property to B it must beA who rocoives other property back from B in return.
That may well be the position of an “ exchange ” viewed as a contractunder tho Roman Law. But I do not consider that this concept, withits implications, should be grafted on to the expression " exchange ”in tho Entail and Settlements Ordinance. The Ordinance is net concernedwith an oxohange viewed as a contract. The “ exchange ” which it has ip.mind in sections 4 and 8 is an exchange in the sense of the cube tits tion ofone property for another,—the coming of one property into the ownershipof a porson in place of another property which goes out of his ownership.Such properties may correctly be said to have been “ exchanged ” theone for the other, whether or not the former owner of the propertyreccivcd in exchange becomes the new owner of the property given inexchange. The Ordinance is not concerned with the origin of the pro-perty received, nor with the destination of the property given, but onlywith the replacement of the latter by the former, its object being toreconcile the freedom of alienation with the safeguarding of existingrights in the property alienated. It is in that setting that the word''exchange” in the Ordinance should be construed.
For these reasons I hold tint the transactions under considerationconstituted an exchange for the purpose of the Entail and SettlementsOrdinance, with the result that the fidei commisaum to which Arnolia’sshare in the 21 Chatham Street property was subject under the deed P8attached in 1894 to tho 20 Bafllie Street property for which it wasexchanged.
Tho next point for determination is whether the deed F8 created onefidei commisaum in favour of Amolia and Leonora and their respectiveissue, or whether it created two separate fidei eommiaao, one in respectof the half share given to Amalia and one in respect of the half sharegiven to Leonora. For If on a true construction olWonejMetcomwiMwaonly waa created, then I think there can be little doubt that upon the
WINDHAM J.—Perera v. de Formeka
10]
death of A media without issue, her half share would not devolve on herintestate heirs, as the appellants contend that it did, but would shiftover by virtue of a, jus accrescendi to the children of the already deceasedLeonora, in accordance with the rule laid down by the Privy Council inTillekeratne v. Abeysefcere1, that so long as one of the persons mentionedor able to show title as an institute or a substitute under the Juki com*missttm is in existence, there will be no lapse, and the fidei commissumwill aoorue so as to benefit such porson to the exclusion of the intestate heirsof a deceased fiduciary or fideicommissary. Tfc was laid down by BertramC. J. in Oarlinahamy v. Juaniaa, that this initial test is the basis of the wholedoctrine of jus accrescendi. It was further laid down in that case, followingearlier decisions on the point, that the jus accrescendi (using that expres-sion in its wider modern sense as meaning any right of accrual and notin its narrower and exclusively testamentary sense under the Roman Law)is applicable not only to fidei commissa created by a will, but also tofidei commissa created by deed of gift, as in the present case, though itwas pointed out by Bertram C.J. that in the case of a deed the jusaccrescendi will only arise from ‘‘ operative words, which expressly orby implication have tins effect
Do the words in P8 create one fidei commissum in favour of Arnoliaand Leonora and their respective issue, so that the jus accrescendi willoperate on the share of Arnolia in favour of Leonora’s issue 1 Theimportant words in H8 for this purpose arc those which give the propertyto them as fiduciaries ,!m equal undivided shares for over", and thecondition that “ the said premises shall after their death devolve on theirlawful issues respectively and in the event of any ono of the said doneesdying without lawful issue her share, right and interest in the said premisesshall devolve on and revert to the surviving donee subject however tothe conditions and restrictions aforesaid
1 will consider presently the bearing of the Knglish decisions on themeaning to be given to the word “ surviving ” in this passage. Buttaking the offset of the gift in P8 as a whole, it doos seem to me that thedonor intended, by the words he used, to create a single fidei commissumonly. With regard to the words il in equal undivided shar< * for ever "I do not think that those words indicate an intention to make t wo separategifts, one to Arnolia and her issue and one to Leonora ami her issue, any*more than the words “ share and share alike ” were held to indicate aplurality of gifts in the cases otSandeman v. Lyampcmmal*,and Usoof tRakimaih 4. Similarly I consklor that the word ” respectively ” is merelyan indication that the children of Arnolia and ljeonora were to takeper stirpes as representing their respective mothers, and not per capita.For the rest, the condition that “ in the event of any one of tho saiddonees ” (sc: whether Arnolia or Leonora) ** dying without lawful issueher share …. shall devolve oh and revert to the surviving doneesubject however to the conditions and restrictions aforesaid" doesseem to indicate a clear intention that neither of the institutes, Arnoliaand Leonora, is to take anything absolutely, whether her own original1 (1897) 2 N. h. R. 313.9 (1916) 3 C. W. R. 38
* (1924) 26 X. L. R. 1294 (191&) 20 X. L. R. 225
102
WINDHAM J,—Pertra v. tie Fonseka
half share or the share of a sister predeceasing her without issue, hutthat the only persons to take absolutely are theJideicommissariesttheirrespective children. Had the words "any one of the said donees"been replaced by such words as " the donee who shall first die ”, theposition would of course have been otherwise. But the condition asworded indicates, to my mind, an intent that the children of both orcither sister shall be the ultimate beneficiaries of the share of both sisters,in short, an intent to create a single jidei commissnm, with the resultthat the rule in TiUekeratne v. Abeysekere will apply.
The use of the words " surviving donee ” inthegiftover wouldat first,and If interpreted literally, appear to negative this intention, ami toprevent the going over of Arnolia’s share to the issue of Leonora by reasonof Leonora not having survived Arnolia. This, however, is inmy view a case where the intention of the donor appears sufficientlyclear from the other words in the gift to enable this court to construe"surviving” as "other”, in order to give effect to that intention-There appears to be no decided case in Ceylon where the question hasarisen whether this word should be so construed, as in similar cases ithas been construed in England. With regard to the English decisions,there iB perhaps no branch of English case law which forms a better exam-ple of what lias been called a “ wilderness of single instances " than thatrelating to the interpretation of expressions used in wills, and of theexpression" survivor ” in particular, and it would be profitless to examinethe oases in detail. Smith v. Osborne1 is the leading casoon the subject-,and there the Houko of Lords interpreted " survivor ’’ as “ other ” onfacts very similar to those in the present case, where there was & giltto the testator’s two daughters as tenants in common in tail, with agift over to the survivor and the heirs of her body should either diewithoutissue. The interpretation was allowed as the only means of givingeffect to the inteution of the testator. In re Palmer's Settlements (1875)44 L. J. Ch. 247, and in Hodge v. Foot * where “ survivor ” was similarlyinterpreted as " other ” the wording was again more favourable tosuch an interpretation, since in both cases the gift over was madeexpressly to the survivors and their children, showing a clearer intentionto benefit such children than to make their parents* survivorship apre-requisite to their benefiting. The tendency in more recent Kngltehcases, however, appears to bo to insist on a more strict interpretationof the word " survivor " unless the testator’s intention in a contrarysense is very clearly expressed. In Anger v. Beaudry3, the PrivyCouncil, in refusing to read “survivor” as “other", laid down thegeneral working rule in the following terms:—
“ The truth is that in the preparation of such gifts the draftsmanis liable to fix his mind simply upon the death of the first of the childrento die, in which case the gift over works without difficulty, and hedoes not concentrate his attention upon what will happen in the eventof the death of a child without issue, who has been predeceased byanother child leaving issuo behind. The gift over, therefore, only toooften does not carry out what, if speculation were permitted, it would
1 (1857) to B. H. mo• (JSSS) 58 E. R. 669.
1 (1996) A. C. lOtO.
WINDHAM J.—Pcrero t>. He Fonseta
103
be reasonably certain that the testator wished, and it is these consi-derations that have sometimes led the Courts to attempt so to readthe words as to make the will conform to what it is confidently believedmust have been the testator’s intention. If the words are so ambiguousas to leave room for such construction, or if there are other words tohelp the moaning, it is one which no doubt the Courts would readilyadopt. But whatever wavering from the strict rule of constructionmay have taken place in the past, it is now recognised that the onlysafe method of determining what was the real intention of a testatoris to give the fair and literal meaning to the actual language of the will.Human motives arc too uncertain to render it wise or safe to leavethe firm guide of the words used for the uncertain direction of whatit must be assumed that a reasonable man would mean ”.
This decision was followed in Gibnour v. Mac PhiUamyi, where the PrivyCouncil refused to interpret “ survivors ” in the loose or “ stirpital ”sense, notwithstanding that the gift over was to “ surviving daughtersand their children It was held that—“ In order to justify a departurefrom the natural and ordinary meaning of any word or phrase there mustbe found in the instrument containing it a context which necessitatesor justifies such departure. It is not enongh that the natural andordinary meaning may product; results which to some minds appearcapricious or fail to accord with a logical scheme of dispositionUpon a consideration of these and other English authorities I thinkthat, if we were to bo bound to apply them to the interpretation of theword “ surviving ” in a fidei commies um in a deed of gift in Ceylon, inrelation to the question whether the jus accrescendi operates, then thedonor’s contrary intention in P8 might not be held to be dearly enoughexpressed to justify the word being interpreted as1; other ”. In particular,any mere plea that, the strict interpretation would not give effect to thedonor’s probable wishes, or that it would presume an unlikely capri-ciousness on his part, would fail, since those were the very pleas whichthe Privy Council in Auger i>. Beaudry and Gilmour v. Mac Phillumy{supra) held to be inadequate, in the passages which I have quoted.
But, while I think this court should be guided by the principles ofinterpretation laid down in those English cases, I do not think it needfeel bound by them to the extent of being precluded from interpretingthe expression “ surviving donee ” as “ other donee ” in the presentcase. The circumstances differ. In England the trend of the decidedcases appears to be towards a stricter interpretation of the word, and thetestator’s intention will be ascertained not by making the will conformmerely to what it is “ confidently believed it must have been ”, but bygiving “ the fair and literal meaning to the actual language of the willIn Ceylon, on the other hand, while the testator’s or donor’s intentionmust of course likewise be ascertained from the terms of the instrument,the position is somewhat different when the meaning to be given to theword " survivor ” or “ surviving ” is, as in the present case, intimatelybound up with the question whether he intended to create one singlefidei commissum or more than one, and whether the jus accrescendi wasintended to operate. For in Ceylon, the question whether the jus1 {1930) A. C. 712.
101
WINDHAM J.—P«reruw.Fonttk*
accrescendi operates depends on the probable intention of tbe personcreating the fidei commissum as disclosed in the last will or donation(Voofc 29. 2. 40); and, as pointed out in Usoof v. Rdhimath [supra) “ thejus accrescendi was not an anomaly which the law regarded with horrorand restrained by every measure possible; it was a benevolent dcvicoinvented for the purpose of giving effect to an intention of the testator,which he was supposed to have forgotten to express And the trendof judicial decisions in Ceylon over the last fifty years appears increasinglyto favour the application of the jus accrescendi. Bertram C.J. inCarlinahamy v, Juanis (supra, at page 140) made the following relevantobservations, with which I respectfully concur“ I confess that Iam not at all dear that the rule established in Tillekeratne v. Abtysektre(supra) is alien to looal conceptions. On the contrary I venture tothink that if those who made dispositions of this sort thought the matterout, they would find that this rule gave effect to their real intention.Their object is to endow their descendants with a particular property.What are the ciroumst&nces which occasion cases in which that rule ischallenged ? They gonerally arise from the fact that some stranger tothe family claims to have acquired an interest in the property by marriage.Sometimes it is the husband of one of tho daughters; sometimes it issome comparatively remote member of his family claiming by inheritancethrough the husband. I can scarcely believe that the authors of theseliberalities contemplated such invasions. Further, if these liberalitieswere to be construed as creating separate fidei commissa attaching toindividual shares, the result would bo that, as time went on, certainshares in the property would become disengaged from the fidei commissum,while others would remain bound. Some of the shares would be subjectto alienation, others would not. The homogeneity of the property as afamily endowroont would be destroyed. I doubt very much whether thisis a prospect which the testator and donors could have contemplated,and 1 am by no means sure that- the rule in Tillekemine v. Abeysekere(supra), though in fact based on the logical and legal interpretation ofa particular document, docs not work out as a very discerninginterpretation of local conditions ”.
These factors, in my opinion, justify the courts in Ceylon in interpretingthe expression “ surviving ” as “ other ” in certaiu cases where perhapsthe courts in England would hesitate to do so, and in doing so in thepresent case. 1 Am therefore of the view that the learned District-Judgewas right in holding that No. 20, Baillie Street, was subject to the singlefidei commissum imposed by tho deed of gift P8 upon the property forwhich it was exchanged, and in bolding that the etfect of that fidei com-missum, upon Arnolia dying issueless after the doath of Leonora, was thatLeonora’s children became entitled to No. 20, Baillie Street, by right ofaccretion notwithstanding that Leonora did not survive Arnolia, andthat tho property did not devolve upon Arnolia’s intestate heirs.
I would accordingly dismiss tbe appeal with coats.
Gratiaiw J.—I agree with my brother Windham.
Appeal dismissed.