150-NLR-NLR-V-17-PERERA-v.-FERNANDO.pdf
( 486 )
1914.
Present : Ennis J." and De Sampayo A.J.
PEBEEA v. FERNANDO.
348-349—D. C. Ckilaw, 4,948.
Trust—Evidence—Oral evidence to ‘prove that a deed of tale woe in realitya mortgage—Evidence Ordinance, s. 92.
Where a person transferred a land to another by a notarial deed,purporting on the face of it to sell the land, it is not open to thetransferor to prove by oral evidence that the transaction was inreality a .mortgage, and that the transferee agreed to re-convey theproperty on payment of the money advanced.
The admission of oral evidence to vary the. deed of sale is incontravention of section 92 of the Evidence Ordinance.
The agreement to re-sell is not a trust, but is a pure contract forthe purchase and sale of immovable property.
fj|HE facts are fully set out in the judgment of De Sampayo A.J.
—Btuva, K.C. (with him F. R. Dias), for first defendant,appellant.
Samarawickreme, for respondent. .
—A. Si. V. Jayawardene, for appellant.
A. Drieberg (with him G. Koch), tar respondent.
Cur. adv. Dult.
November 6, 1914. Ennis J.—
In this case the plaintiff by deed No. 89 bf ; December 17, 1908,conveyed to one Diego Perera certain lghdcf.' Diego Perera diedsome three years ago, and his widow and executrix, the first defend-ant, sold the land to the second defendant: ' The plaintiff sought are-conveyance of the land from the second defendant on the groundthat the 'first defendant held it in trust. The learned District Judgeordered the second defendant to execute a conveyance to theplaintiff on payment by the plaintiff of (the shin-of Bs. 1,540.38 intoCourt. From this decree both defendant^ appeal.
( 487 )
In order to prove the trust oral evidence was admitted, and the 1M4.admissibility of this evidence is the first question on the appeal, laimuj.So far as T have been able to follow the argument of the plaintiff*respondent, this evidence js to show that the parties to the deed FernandoNo. 89 were m the relationship of borrower and lender, and that thelands were really conveyed by way of mortgage. Such evidence,in my opinion, comes within the direct prohibition of section 92 ofthe Evidence Ordinance ; it is oral evidence tti show that the trans-action was other than that disclosed by the deed and to contradictthe deed. It was then urged that it would be admissible underthe second proviso to section 92, but evidence of a separate oralagreement under that proviso is only admissible when it isnot inconsistent with the terms of. the deed. Neither of thesecontentions give any ground, in my opinion, for the admission ofthe oral evidence. The deed purports to be a conveyance on sale,not a mortgage, and it is not alleged that Diego Perera did not usehis own money, or that he acted as ageDt for another, or that heacted fraudulently, or any of the grounds upon which iB Ceylon(Somasunderam Che tty v. Todd ; 1 Pronchihamy v. Don Davith ; sD. C. Jaffna, 7,409) oral evidence is admissible to prove a trust notinconsistent with the deed.
I would set aside the decree and dismiss the plaintiff’s actionwith costs.
De Sampayo A.J.—
The plaintiff, who was the owner of four lands, was indebted inthe stun of Es. 2,500 on a mortgage decree entered against him inrespect of three of the lands, and in the1 stun of Es. 1,000 on ausufructuary mortgage of the fourth land called Nittullagahawatts.
By deed dated December 27, 1906, he transferred the four lands toone Diego Perera for the sum of Es. 3,500, of which Es. 2,500 waspaid by Diego Perera in satisfaction of the mortgage decree, and thebalance Es. 1,000 was ret§ined by him to be paid to the usufructuarymortgagee. Diego Perera having died, the first defendant- who ishis widow and the executrix of his will, sold the land called Nittulla-gahawatta to the second defendant by deed dated June 27, 1913.
The plaintiff’s case is that, although the transfer to Diego Pererawas in form an absolute sale, it was executed on an agreementbetween them that Diego Perera should advance the sum of Es. 3,500for the purpose of paying the plaintiff’s mortgage debts ; that theplaintiff should repay the amount by delivery of coconuts at acertain rate; and that T>iego Perera should, hold. the lands in -themeantime and re-convey them to the plaintiff on the repaymentof the full amount advanced. . Be says that under this agreementhe remained in possession of the first three lands and deliveredcoconuts to the value of Es. 975, and that as the usufructuary
* (1910) 13 If. L. R. 391
* (1911) 15 N. L. R. 13-16.
( 488 )
1914* mortgage of the fourth land had not yet been discharged, he tenderedDb Sawpayo k°^e^en(^a^ sum of Bs. 1,525, being the balance of the
Ajr. actual sum advanced by Diego Perera, which the first defendantPererav h°wever refused to accept. He accordingly brings this action, andFernando prays that the first defendant be ordered to execute a conveyance ofthe three lands still held by her, and the second defendant to executea conveyance of Nittullagahawatta purchased by him from the firstdefendant. He further says that the lands were originally trans-ferred to Diego Perera for less than half their value, and claims inthe alternative a rescission of the deed on the ground of enormialatio.
The alternative claim failed, because the District Judge held onthe evidence that the consideration for the conveyance was fairlyequal to the value of the lands, but he has allowed the plaintiff’sclaim on the first cause of action, and both defendants have appealed.
The case against the second defendant may be disposed of at once.That depended on proof that the second defendant took the con-veyance from the first defendant with notice of the alleged agreement.The only evidence on the point is the fact that the plaintiff, evenafter the transfer to Diego Perera, continued to be in possession ofthe first three lands, but I do not see how that fact can be said tohave informed the second defendant of the agreement. Besides,it is the plaintiff’s own case that he delivered the coconuts of thoselands to Diego Perera, and a stranger may well think that theplaintiff was in possession on behalf of Diego Perera. Moreover,it is not one of those lands that the second defendant purchased,but Nittullagahawatta, which is in the possession of the usufructuarymortgagee. In my opinion, apart from the legal questions arisingin this action, the plaintiff has failed to make out his case againstthe second defendant.
As regards the claim against the first defendant, the principalquestion is whether the plaintiff can establish the alleged agreementby oral evidence and enforce it by action. The defendants objectedto oral evidence being admitted, and I think the objection should •have prevailed. Counsel on behalf of the plaintiff-respondentcontended that the relation arising out of the circumstances betweenthe plaintiff and Diego Perera was that of borrower and lender, andthat the transfer was in fact only a mortgage, with the effect thatDi6go Perera was bound to re-transfer the land on repayment ofthe sum of money in question. This being the plaintiff’s case, it isclear that the admission of oral evidence to vary the deed of sale isin contravention of section 92 of the. Evidence Ordinance and thewhole law relating to the nature and effect of written documents(Somaswndetam Chetty v. Todd1). It was sought to avoid thisdifficulty by suggesting that the agreement was proved, not so muchbv oral testimony, as by evidence of subsequent conduct. The
M1910) 13 N. L. R. 361.
( 489 )
allusion is to the foot of possession of the lands by the plaintiff and 1914.of delivery of coconuts under tho agreement. But conduct can only ^corroborate the oral evidence as to the original agreement, and A.J.thus the objection is not really met. Moreover, the suggestionamounts to the argument that part performance takes the agreement Fernandoout of the statute, which has been frequently held to be untenable.
Another aspect of the case is that arising from idle provision of theOrdinance No. 7 of 1840, which requires a notarial instrument toestablish any agreement relating to immovabfe property. Herethe plaintiff refers to the alleged trust and relies on the. decisions ofthis Court, which have laid down the principle that the Ordinancewill not be allowed to be used for perpetrating a fraud, and of whichOhlmus v. Ohlmus 1 cited by the District Judge is an example. Butthose decisions when examined will be found not to apply to such acase as this. The argument as to the deed of sale being only amortgage has been above disposed of, and the position then isreduced to this : that plaintiff seeks to enforce an agreement tore-sell the lands on repayment of the amount paid by the purchaserDiego Perera. Such an agreement does not constitute a trust,but is a pure contract for the purchase and sale of immovableproperty, and the Ordinance No. 7 of 1840 declares it to be voidin the absence of a notarial instrument. The case Amerasekera v.
Rajapakse 4 is in point. See also Pronchihamy v. Don David.3 andthe Jaffna case therein cited,4 where the class of cases in which theCourts in Ceylon will allow oral agreements to be proved has beenpointed out and the previous decisions have been distinguished.
I think that the appeals should be allowed with costs in bothCourts.
Set aside.
♦
(1911) 15 N. L. R. 13.* Ibid., p. 16.
1 {1906) 9 N. L. R. 183.
3 (1911) 14 N. L. R. 110.