RABOT et al v. NEINA MARIKAR et al

031-NLR-NLR-V-16-RABOT-et-al-v.-NEINA-MARIKAR-et-al.pdf


( #9 )
Present: Lascelles C.J. and Wood Benton.J.
ABqT et al. v. NEINA MABIKAB et al.
332—D. C. Colombo, 33,129.
Joint will—Fidei eommissum—Power to survivor to sell property in ikeevent of its becoming dilapidated—Sale in breach of trust bysurviving testator—Rights of bona fide purchaser—Death offidei commissarius before fiduciarius.
A surviving spouse has no right to revoke a mutual will (a) ifthe mutual will disposed of the joint property on the death of thesurvivor, that is to say, where the property is consolidated intoone mean for the purpose of a joint disposition of it; and (6) if thesurvivor has accepted some benefit under the will.
Even where a mutual will has massed the joint estate and thesurvivor has adiated and accepted benefits under the will, and hetransfers or mortgages the joint estate to a bona fide purchaser ormortgagee, the transfer or mortgage as to half the estate, namely,the survivor’s half, is valid and cannot be set aside by the legatees,who in such a case have a personal claim against the survivor fordamages.
A joint will provided that the property was not to be mortgagedby the surviving testator, and that after the death of both thetestators the properly was to devolve on their daughter A, andafter her death on her children and grandchildren. The joint will,however, permitted the surviving testator to sell the property onlyin the event of its becoming dilapidated; in that'case he was obligedto invest the proceeds of the sale in accordance with the fideieommissum. The surviving testator sold the property in breach ofthe trust to one 8, from whom the defendants derived title.
IMS.
1918.
Aabot v.NonaMarikar
( 100 )
Held, that if the defendants were bona fide purchasers forvaluable consideration (and without notice of the breach of trust),they were entitled to a half share of the property.
Held, further, that the fidei commissum did not fail on A dyingbefore the surviving testator, as A died leaving children.
rp HE facts are set out in the judgment of Wood Renton J.
Bawa, K.G. (with him Allan Drieberg and Bartholomews), for theappellants.—(1) Christina had an absolute power to sell the propertyunder the joint will; the will only took away the right to mortgage;a prohibition against alienation should not be imported intothe' will; the presumption is always a prohibition againstalienation.
The Court was wrong in holding that Christina had sold theproperties in breach of the trust created by the joint will; the onus,was ou the plaintiffs to have proved affirmatively that the salewas effected in fraud of the legatees. The District Judge cannotquestion the sale by Christina; she was the sole judge as to whetherthe house was dilapidated or not. The evidence shows that thehouse is an old house. It is not open to the District Judge to gobehind the decision of Christina.
Christina had a right to sell at least a half share of the jointestate to a bona fide purchaser; the District Judge has not foundthat the appellants were not bona fide purchasers, and it is notaverred that the appellants were not acting bona fide in purchasingthe properties. The surviving testator in the case of a joint will isnot in the position of a fiduciarius. He has full dominium as to ahalf share of the estate. The legatees have only a personal actionagainst the surviving testator or the estate of the surviving testator;they have no real right to vindicate the lands from purchasers.Juta on Wills, 119-121, 112; Mendis v. Mohideen;1 Lewin on Trusts,Uth ed., pp. 527, 514.
The fidei commissum failed on the death of Antoinettebefore Christina; Christina had therefore full right to sell a halfshare of the properties. Galliers v. Kycroft;2 Mohommad Bhaiv. Silva.3
The joint will has not been proved on the death of Christina;there is no proof to that effect; the will was only proved on thedeath of her husband.
de-Zoysa, for the respondents.—(1) It is dear from the evidencethat Christina sold the property with the object of getting rid of thefidei commissum, and not as the house was dilapidated. If Christinahad honestly thought that the house was in a dilapidated condition, *
* (190%) 6 N. L. A. 317.2 (1898) 8 Bal. 74.
3 (1911) 14 N. L. A. 193.
1918.
( 101 )
the Judge cannot question that opinion. But the [District Judgehas found that she acted mala fide.
All the authorities cited by counsel for. the appellants refer toa purchase by a bona fide purchaser. The purchaser from Christinawas not a bona fide purchaser. The defendants cannot be in abetter position than the person from whom they claim title. Thesale by Christina being invalid, the subsequent sales are alsoinvalid. The deed of sale by Christina expressly refers to the will.Anyone reading the will and the recitals in the deed must say thatthe sale was not for the purposes indicated by the deed.,
The question whether Christina had a right to sell ahalf share was not raised in the lower Court.; none of the issuesframed covers the point. The point cannot be raised here for thefirst time.
The fidei commissum is not affected by the death of Antoinette,as she left children behind. This will was considered in Gould v.Souza.1 At page 381 Moncrieff J. said that if the fidei commissariuspredeceased the fiduciarius leaving issue, the fidei commissum wouldnot fail. Counsel also cite<J Samaradiwakara v. Saram2 Samara-diwakara v. Saram *
Rabat v.NeinaMarikar
Bawa, K.C.t in reply, cited 2 Burge (1st ed.)t pp. 129t 133.
Cur. adv. vutt.
February 26, 1913. Lascelles C.J.—
It is unnecessary to recapitulate the facts of this case, which arefully set out in the judgment of my brother Wood Renton, which Ihave had the advantage of seeing.
The first issue is whether Christina B aldersing transferred theproperty in dispute to Edward Reginald Spalding for the purposeof and in accordance with the terms of the will. The joint will,in the clause constituting the fidei commissum, declared that theimmovable property should not “ be liable to be mortgaged afterthe death of either of us,” but that it should be possessed by thesurvivor during his or her natural life, and that after their respectivedeaths the houses Nos. 3 and 4, Maradana, were given and bequeathedto the joint testators’ daughter Antoinette, to be possessed by herduring her natural life; after her death it was to devolve and revertto her children and grandchildren “ in the manner that the saidhouses Nos. 3 and 4 shall not be in any way liable to be seized orsold for any debts which may be contracted by our daughter or -her Husband, but the same is hereby entailed and prohibited frombeing mortgaged or sold or in any way encumbered.”
3 (1910) 2 Cur. L. R. 97.
3 (1911) U N. L. R. 321.
i.(1902) 2 Br. 378.
1018.
IiABOBLLBS
C.J.
Babot v.NeinaMarikar
( 102 )
The fourth clause in the joint will contains the followingprovision:—.
“ And although we have prohibited from mortgaging ourlanded property, still in case the landed property andits buildings be old and decayed, then our executor orthe survivor of us may sell the same without any orderof Court, and with the. proceeds of such sale purchaseother landed property, which is to remain as entailed, orthat the proceeds be deposited in the Loan Board orotherwise invested, for the benefit of the children, towhom such property is hereby bequeathed.”
Beading these clauses together, the intention of the joint testatorsas to the powers of alienation to be exercised by the fiduciary legateesappears, to be clear. The property was not* to be mortgaged at all,neither was there any general power of sale, but the survivingspouse or the executor was given a restricted power of sale. He orshe was permitted to sell the house, property only in the event of itsbecoming dilapidated, and in that case he .or she was obliged to investthe proceeds of the sale in accordance with the fidei commissum.Then arises the question of fact whether the sale by Christina toEdward Spalding was a proper exercise of the restricted power of salegiven to her by the will.
The question whether a building is so dilapidated that it is in theinterest of the beneficiaries that it should be sold is to some extenta question of opinion, and if the evidence showed that ChristinaBaldersing sold the property in the honest belief that the conditionof the property was such that it could be sold under the power in thewill, it would be difficult to impeach the sale on the ground thatChristina Baldersing had formed an erroneous opinion as to thecondition of the property.
But the evidence leaves no doubt as to the breach of trust whichwas committed. Christina, at the time of the sale, was living withher son-in-law Francis Perera, who was the father-in-law of EdwardSpalding. Francis Perera and Edward Spalding between themacquired the entirety of the property left by Jacobus Baldersing, andthere is nothing to show that the proceeds of the sale were appliedin accordance with the will. The purchase by. Spalding of theproperty in question was, as the District Judge puts it, not madebecause the premises were decayed, but was a step in the operationof Francis Perera and himself to obtain for themselves the propertyowned by Christina Baldersing. That the property was sold inbreach of the terms of the fidei commissum is, I think, clear on theevidence. There can be no doubt but that, if the defendants hadknowledge or notice of the terms of the will, the legatees would beentitled to set aside the transfer in their favour; but what is theirposition, assuming that they had not such knowledge of notice ?
1M8.
( 108. )
The Roman-Dutch law on this point is summarized in the notesto Juta’8 Leading Cases with reference to the decision of the PrivyCouncil in 8. A. Association v. Mostert1 and the Cape Colonycase of Haupt v. Van der Heever’s Executor 3 in the followingterms:—
“ Even where a mutual will has massed the joint estate andthe survivor has adiated and accepted benefits underthe will, and he transfers or mortgages the joint estateto a bona fide purchaser or mortgagee, the transfer ormortgage as to half the estate, namely, the survivor’s. half, is valid, and cannot be set aside by the legatees,who in such case have a personal claim against, th'esurvivor for damages."
The principle being that the acceptance of benefits under themutual..will by the survivor gave the legatees not a real right tothe property bequeathed, but a personal right against the survivor.The dominium, it was considered, was not in the legatees, and thesurvivor, as the owner, could sell or mortgage his half; but if thepurchaser or mortgagee had knowledge or notice that the alienationwas contrary to the terms of the will, then the Court would allowthe legatees to set aside the sale or mortgage on the ground that thetransaction was fraudulent.
The rights of the defendants, in my opinion, are determinable onthis principle, and I agree to the order proposed by my brotherWood Renton. I also agree that we ought not at this stage to takenotice of the objection, raised now for the first time, that therecord does not disclose proof that the joint will, regarded as thewill of the wife, had been Admitted to probate. The objection,if relied on, should have been taken at an earlier stage.
The appellants have also attacked the plaintiffs’ title by contend-ing that the fidei commissum failed by reason of the death ofAntoinette in the lifetime of the fiduciaria Christina. In supportof thiB contention we were referred to the decision of the PrivyCouncil in Galliers v. Kycroft3 and to other local cases.
But these authorities are not in point. There is no question inthis case whether the condition si sine liberis decesserit should beread into the will. It is there already. The intention of the jointtestators that the gift to Antoinette should not go over in the eventof her dying leaving children is clearly indicated by the words“ and in case our said daughter Antoinette Balderaing, beingmarried, dies without issue, then the said houses Nos. 3 and 4 areto revert to us and to our heirs, so that her husband may not have 'any right or title to the said property.”
Imboelles
C.J.
Sabot p.NeinaMarikar
» (1872) Juta L. C., Part. II., p. 107.* (J888) Juta L. C., Part. II., p. 113.
• (1898) 8 Bal. 16.
1913*
IjABOBLXSB
C.J.
Robot t>.VeinsMorikar
< 104 )
It was only in the event of Antoinette dying without children thatthe substitution in favour of the joint testators was to take effect.In the face of the language of the will I do not think that it can becontended that the fidei commissum lapsed on Antoinette’s death.
For the above reasons I agree with the order proposed by mybrother.
Wood Benton J.—
This case arises under the joint will dated December 6, 1855,of Jacobus Baldersing and his wife Christina, who were married incommunity of property. Each of the spouses bequeathed to thesurvivor all the property to which he or she was respectivelyentitled, subject to the following condition: —
" That all the houses and lands and all immovable propertyshall not be liable to be mortgaged after, the death ofeither of us, but the same shall be possessed by thesurvivor during his or her natural life, and that aftertheir death respectively the landed property of ourestate is to be disposed of in manner following, thatis to say, the. houses Nos. 8 and 4, situate in Maradana,we give and bequeath to our daughter AntoinetteBaldersing, to be possessed by her during her naturallife, and . after her death the same is to devolve andrevert to her children and grandchildren."
The terms of the general clause just quoted were qualified by thefollowing provision: —'
“ And although we have been prohibited from mortgaging ourlanded property, still in case the landed property andits buildings be old and decayed, then our executor orthe survivor of us may sell the same without any orderof Court, and with the proceeds of such sale purchase otherlanded property, which is to remain as entailed, or thatthe proceeds be deposited in the Loan Board or other-wise invested, for the benefit of the children, to whomsuch property is hereby bequeathed.".
The premises in dispute in the present action form part of housesNos. 3 and 4, Maradana, mentioned above. Jacobus Baldersingdied in 1856. Christina died on May 14, 1910. Their daughterAntoinette died in 1861, leaving one child, the first plaintiff-respondent, who claims title under the joint will. The secondplaintiff-respondent is the husband of the first. The defendants-appellants derive title from Christina in the following way. By deedNo. 4,488 of December 10, 1889, purporting to act under the powerof sale created by the will, she sold the premises to Edward Spalding.By deed No. 1,509 of August 26, 1905, Spalding sold the portion
(, 105. )
here in dispute to Jane A. Perera, who by deed No. 1,510 of evendate transferred it to George Horatio Don. By deed No. 1,511,also dated August 26, 1905, Don in turn transferred the portion toPodi Nona Bupesinghe, who by deed No. 1,756 of May 2, 1909,transferred it to .Sieneris Banesinghe. By deed No. 1,101 ofFebruary 15, 1909, Sieneris Banesinghe sold the portion in questionto the defendants-appellants, who by deed No. 1,699 dated February27, 1911, transferred it to themselves and to two other persons,whose names are immaterial, as trustees for them. The respondentsallege that since May 14, 1910, the appellants have been in wrongfulpossession of the property in suit, and claim a declaration of title,ejectment, and damages.
The case went to trial on three issues:—
Did Christina Baldersing transfer the portion in dispute
to Edward Beginald Spalding for the purposes and inaccordance with the terms of the will ?
Is such sale valid without the leave of Court ?
(8) Was the purchaser bound to see that the proceeds wereapplied in manner provided by the will to render thetransfer valid ?
The learned District Judge held that the burden of proving thefirst issue was on the appellants, and the burden of proving thesecond and third on the respondents. The only witnesses examinedwere Mr. Spalding on behalf of the appellants, and the secondrespondent on the other side. In the results the learned DistrictJudge answered the first issue in the negative and the third inthe affirmative. The second issue was apparently abandoned atthe trial. On these findings he gave judgment in favour of therespondents. *
It was argued in support of the appeal that, while the joint willhad been proved in so far as it was the will of Jacobus Baldersing,there was no affirmative evidence of probate of the will, regarded asthat of Christina. That point was not taken in the District Court,and I do not think that we ought to allow it to be raised for thefirst time in! appeal. The next point on which the appellants’counsel relied was that, as Antoinette had died during the lifetimeof Christina, there was in any case a lapse of the fidei commissumin so far as Christina’s share in the property was concerned, andfurther that, as the effect of the will was to vest the property inChristina on the death of Jacobus Baldersing, and it did not providefor a fidei commissary substitution of the children of Antoinette inthe event of the death of their mother, the fidei commissum failedas a whole when Antoinette died, survived by the fiduciarvaChristina. In my opinion this argument fails in view of thelanguage of the will itself, which does in terms substitute thechildren and grandchildren of Antoinette for theitf mother, and
1918.
WoodBenton J.
Rabat
Neina
Marikar
1918.
WoodBoston J.
Robot *•If etnaMarikar
( 106 )
shows clearly that the property was to revert to the spouses andtheir heirs only in the event of her having died without issue.Moreover, the will massed the property of the two spouses for thepurpose of the fidei commissum in favour of Antoinette and herchildren and grandchildren.
The judgment wider consideration was, however, attached morestrongly in regard to the findings of the District Judge on thefirst and third issues. It was contended that the will conferred onChristina a power of sale unfettered by the control of the Courtunder the circumstances which it contemplated; that that powermust be presumed, in the absence of evidence to the contrary, tohave been honestly exercised; that if it was so exercised, the Courthad no right to review Christina's discretion; that the title whichthe appellants derived through her was unimpeachable, and thatneither Mr. Spalding nor any of the subsequent purchasers throughwhom the appellants claim was bound to see that the proceeds ofthe sale by Christina had been applied in conformity with theprovisions of the joint will. As I interpret it, the joint will bynecessary implication prohibited Christina- from selling any portionof the property, save for the purpose of replacing dilapidated housesby new ones, and expressly required her either to invest the proceedsof the sale of old houses in the immediate purchase of new ones, orto deposit them in the Loan Board or otherwise invest them for thebenefit of the fidei commissarii. It is quite true that the clause inthe will by which the fidei commissum is constituted prohibitsin terms “ mortgaging ” alone, but the subsequent provisionthat the property is to be possessed by the survivor and then byAntoinette, is to devolve thereafter on Antoinette’s children andgrandchildren, and is to revert to the spouses and the other heirsonly in the event of Antoinette dying without issue, is whollyinconsistent with the theory that Christina possessed any generalpower of sale under the will. The case is, therefore, one of afiduciaria, who has power to sell only under an exception from ageneral, although implied, prohibition of any sale of the propertyin question. Interpreting the will in that sense, I think that itwould have been incumbent on Christina herself, if she had comeforward to support any exercise by her of the power of sale conferredupon her by the will, to show both that she had exercised it duly,and that she had applied the proceeds in the manner prescribed bythe will. There can be no doubt, both on the documentary andon the vivd voce evidence, but that the power in question was notduly exercised. Christina's transfer in favour of Spalding itselfrecites, that the sale was being effected partly at least for the purposeof repairing other houses. The District Judge came to the conclusionyfrom a personal inspection by him, for the purposes of the trial, ofthe old walls and timber of the house, that the sale in 1899 onthe alleged ground that it was in a decayed condition could not
1918.
( 107 )
have been necessary, and the evidence uncontradicted, and indeed^ifwxhftllflngftd, in cross-examination of the Becond respondent thatChristina had bought no property for his wife subsequent to thesale is sufficient to show that the proceeds were not dealt with byChristina in accordance with the provisions of the will. I quiteagree with the appellants’ counsel, and Mr. de Zoysa, counsel forthe respondents, who argued their case very well indeed, admitted,that if Christina exercised the power of sale given to her by thewill in good faith, it might not be possible to challenge the exerciseof her discretion. But I think that the burden would have beenupon her of showing that she had exercised a bona fide discretion inthe matter, and for that purpose of proving that she had fulfilledthe conditions prescribed by the will. If the respondents had only'had Christina herself and the immediate purchaser from her tocontend with in this action, their right to the judgment which theyhave obtained would be clear. It was held by the Pnvy Council in8. A. Association v. Mostert1 that a surviving spouse has no rightto revoke a mutual will (a) if the mutual will (disposed of the jointproperty on the death of the survivor, that is to say, where theproperty is consolidated into one mass for the purpose of a jointdisposition of it; and (b) if the survivor has accepted some benefitunder the will. Both conditions exist in the present case. Therewas a clear massing of the property, and the evidence shows thatChristina adiated the inheritance. It seems, however, that the ruleabove stated does not in such oases extend beyond the revocationof the mutual will, and that even where a mutual will is massed inthe joint estate, and the survivor has adiated and accepted benefitsunder it, the survivor can alienate a half of the joint estate to abona fide purchaser (Haupt v. Van der Heever*s Executor 2). Here,.again, the onus of proving bona fides would, in my opinion, rest onthe purchaser, and a bona fide purchaser would be one who had noknowledge or notice of the terms of the actual will. Mr. EdwardSpalding was clearly not in that position. He .was married to agranddaughter of Christina Baldersing, and lived in Christina'shouse, and knew all about her affairs. Moreover, the deed oftransfer by Christina in his favour expressly referred him to thewill, and disclosed on the face of it that the sale was not beingeffected in compliance with its provisions. Do the subsequentpurchasers stand in a better position ? An examination of theoriginal deed of transfer would have given each of them notice of thefact that he derived his title from the survivor of two spouses whohad executed a joint will, and also that the transfer itself wasnot justified by the terms of that will. Jane Anna Perera couldhavef been undert no misapprehension on the subject. She wasChristina's daughter, and her husband Francis Perera had livedin Christina’s house and had taken an even more active part thani (1873) Jnta L. 0., Part II., p. 107.3 (1888) Juta L. C., Part II., p. 119.
Wood
Benton J.
Rabot t>.NeinaMarihar
IMS.
WoodBbhtok J.
Robot v.NeinaMarikar
( 108 )
Mr. Spalding himself in her affairs. The view of the District Judgeis that Francis Perera and Spalding had set themselves to acquireall Christina’s property. There is, however, nothing in the evidenceto indicate that the later purchasers—George Horatio Don, PodiNona Bupesinghe, and Sieneris Banasinghe—and still less that thedefendants-appellants, who are Moormen, had any actual noticeof the limitations of Christina Baldersing’s power of sale. It might,of course, be argued that they ought to be held to have been affectedwith constructive notice. But the evidence as to the circumstancesunder which they successively purchased the property and as tothe manner in which it has been possessed is so scanty that I donot think it would be right that the appellants should be deprivedof the entire benefit of their purchase on the material before us.The appellants ought, in my opinion, to have raised at the trialthe contention that they, in any event, were purchasers bona fide forvaluable consideration and without any notice of the infirmity oftheir title. No attention, however, would appear to have beenpaid by either side at the trial to this aspect of the case.
I would set aside the decree of the District Court, declare that theappellants, if they establish to the satisfaction of the District Judgethat they were bona fide purchasers for valuable consideration andwithout actual or constructive notice of Christina Baldersing’sbreach of trust, are entitled to one-half share of the propertyconveyed by their deed of transfer No. 1,101 of February 15, 1909,
and to nothing more, and send the case back for further inquiryand adjudication on the basis of that declaration. It will be opento either side to recall for further examination or cross-examination,as the case may be, any witness who has already been examined,and to adduce such further evidence as may be. thought desirable;The inquiry must be limited, however, to the issue stated above,namely, whether the appellants are bona fide purchasers for valuewithout notice. But evidence as to the manner in which the
property has been possessed would be relevent to that issue. Iwould leave all costs, including the costs of the present appeal, inthe discretion of the learned District Judge.
Sent bdctcT
♦