127-NLR-NLR-V-45-SANMUGAMPILLAI-.-Appellant-and-ANJAPPA-KONE-Respondent.pdf
Santnugampillai and Anjappa Hone.
463
1944Present: Soertsz and Jayetileke JJ.SANMUGAMPILLAI et al., Appellants, and ANJAPPA NONE,
Respondent.
48—D. 0. Kandy, 387.
Trust—Land bought by ■a person as nominee of another—Informal agreement to-
retransfer—Validity of agreement—PreventionofFraudsOrdinance
{Cap. 57), s. 2.
Where Apurchased property as thenominee of B and paid the
purchase price, and where A agreed by an informal writing to retransferthe propertyto B on the paymentof a certain sum of money before a
specified date,—
Held, that A did not hold the property in trust for B.
Held, further, that the informal agreementwasobnoxious to the
provisions of section 2 of the Prevention of Prauds Ordinance.
Where a case is sent back by the Supreme Court for further trialin the District Court and new parties are introduced to the action on theapplication of the appellants, such parties are bound by the findings ofthe Supreme Court at the first hearing in appeal.
A
PPEAL from a judgment of the District Judge of Kandy. The factaare stated by the learned Judge as follows: —
The defendants and the added defendants were admittedly the ownersofBass Rockestate and they executeda mortgage bond in favour of
Messrs. Keell& Waldoek who putthebond in suit, obtained decree
and had the estate sold and became the purchasers thereof. Thereafterthe defendants sued Messrs. Keell & Waldoek in- case No. 47,114 of thisCourt for a declaration that the latter were holding the said estate intrust for them and for an order directing them to convey the said estateto the defendants. That case was compromised and the terms of settle-ment have been produced. The relevant term to be noted is that
466
SOERTSZ J.—Sanmugampillai and Anjappa Rone.
Messrs. Keell & Waldoek were to convey the property to the defendantsor to any nominee of theirs if the defendants paid the sum of Its. 35,250on or before November 30, 1936.
The defendants constituted Anjappa Kone their nominee and hepurchased the estate from Messrs. Keell & Waldoek upon the deed P 1of November 30, 1936, he paying to Messrs. Keell & Waldoek a sum ofRs. 35,250. On the same date that P 1 was executed the defendantsand Anjappa Kone entered into an informal writing by which it was,inter aliat agreed that the defendants were to be entitled to obtain areconveyance on payment of a certain sum of money before November 30,1938. The physical possession of the estate was left with the firstdefendant who was appointed by Anjappa Kone his Superintendent.
N. Nadarajah, K.G. (with him H. W. Thambiah and S. R. Wijayatilake),for defendants and added defendants, appellants.
H. V. Perera, K.G. (with him/. E. M. Obeyesekere and E. P. Wijetunge),for plaintiff, respondent.
Cur. adv. vult.
September 1, 1944. Soertsz J.—
The plaintiff, the administrator of the estate of one Kone, brought thisaction, originally, against the first and second appellants only, allegingthat they were disputing and denying the plaintiff's intestate title to atea estate named Pass Rock estate, and asking for a declaration of title,a writ of ejectment, and damages.
The first, and second appellants filed answer stating that Kone was theirtrustee in the circumstances set forth in paragraph 3 (a), (b) and (c) of theanswer.
At the trial, the main issues that were adopted raised the questionwhether there was or was not a trust, and whether the first and secondappellants were entitled to lead parol evidence to establish it.
The Trial Judge by agreement tried the latter issue as a preliminaryissue, and held in favour of these two appellants. The parol evidencesought jbo be led in support of the Trust was the non-notarial documentD 1. The plaintiff appealed, and this Court (Howard C.J. and Hearne J.)reversed the decision of the Trial Judge. The Chief Justice observed asfollows:—“ The parol evidence that was proposed to be called wasto establish the matters referred to in paragraphs 3 (a), (b)and (c) ” of the answer, but the “ facts of this case cannot be distinguishedfrom those in the Privy Council Case of Adaica/ppa Chetty v. CaruppenChetty 1 ”, and that, therefore, fresh evidence was inadmissible. .In otherwords, Their Lordships must be understood to have held that D 1purported to create not a trust but something much more resembling amortgage or pledge than a trust or that it was a contract or agreement foreffecting the sale of land, for according to the opinion of the Privy Council,those would be the true transactions resulting from the agreements set upin – that case. Their Lordships here did not, however, expressly sayunder which of these alternatives D 1 came, nor did they say it waswithin both those alternatives. They merely ruled D 1 inadmissible andremitted .the case for the other issues to be tried. The other substantial
i 22 jv. z Jf- 417.
SOEETSZ J.—Sanmugampillai and Anjappa Kone.
467
issue that remained to be tried was whether there was a trust. Now,it is obvious that when the ease was so remitted, the establishment of thetrust had to depend on evidence other than that afforded by D 1 whichwas rejected.
At the resumed hearing, senior Counsel who appeared for .theseappellants together with Counsel who had already appeared for themprocured the adoption of certain additional issues, the chief of thembeing—
Did the deceased (i.e., Kone) hold the property as a nomineeagent arjd/or trustee for the defendant and two others ?
»Is the beneficial ownership in the property vested in the defend-ants and the two others ?
Was .the deceased given legal title as security for any sum orsums that may be due from the defendants and the two others ?
Counsel also sought and obtained the introduction into the case ofthese two others, as added parties. These added parties filed answerand the only new feature introduced into the case by their answer wasthat, on their part, there was a claim for an accounting by the plaintiffon behalf of Kone of the administration of the alleged trust in order todetermine the relief the cestuis gue trusten-t were entitled to. An examina-tion of the amended pleadings and of the additional issues as well as thefact that the third and fourth appellants were brought into the ease asadded parties leads irresistibly to the conclusion that the appellants weremaking desperate efforts to break out of the position in which their cases.tood when it was remitted for trial according to the directions givenby this Court, for D 1 was still their one and only hope if they could onlysecure a different interpretation of it. But the more their case was madeto appear to change, the more did it, in reality, remain the same case.The appellants could establish their case of a trust only by adducingevidence other than D 1. They led no such evidence. They producedtwo letters D 4 and D 5 dated April 28 and June 22, 1938, respectively,which do not advance their case of a trust at all. Indeed D 4 seems tonegative that case, for in it the appellants’ proctors put their case to Koneas a case of'an agreement .to retransfer. The proctors write “ Thisproperty "was, we understand, transferred to you upon the basis that,if a certain sum together with the interest was paid to you, you wouldtransfer that property D 5 is Kone’s reply to D 4 and it shows thatKone was prepared to abide by his informal agreement. He informsthe appellants’ proctors that the purchase price due at that date, isEs. 32,000.
In this state of things, I do not see how it is possible for the appellantsto succeed since there is no evidence whatever to establish their case of atrust. The first and second appellants were, certainly, bound hand andfoot by .the judgment given on appeal. Counsel for the appellant,however, sought a way out of this difficulty by attempting to differentiatethe case of the original appellants from that of .the added parties who,he contended, were not bound by the ruling given by this Court beforethey themselves came into the case, and that it was open to them, bymeans of additional arguments, to commend to us an interpretation of
468
SOERTSZ J.—Sanmugampillai and Anjappa Kone.
D 1 different from that given by the earlier Bench. Counsel also sub-mitted that issue 9 raised in addition to the question of trust the questionof Kone being the appellants' nominee or agent.
In regard to the first contention, although the third and fourthappellants were not parties to the first appeal, when their co-appellantshere sought to have them added, they readily consented. Indeed, as Ihave already observed, their introduction into the case appears to havebeen a concerted move in an optimistic attempt to circumvent the ordermade on the earlier appeal. In my opinion, when they came into the casewithout protest or objection, they came into it as it stood, and must bedeemed, in all the circumstances, to have agreed to stand or fall Aith theoriginal defendants, appellants. If that were not so, if the third andfourth appellants were entitled to contend for a different interpretationof _D 1, and if they succeeded in that contention, the resulting positionwould be so embarrassingly contradictory that no Court of law cancontemplate it with equanimity—two irreconcilable findings on thesame question, on the same material, in the same ease. As for thesecond contention, namely that issue 9 raised the question of nomineeshipand agency, that question is the old question of the trust dressed in newhut ill-fitting garments. However, to say one word in regard to thisquestion of agency or nomineeship raised in issue 9, it seems to me utterlyimpossible, on the facts of this case, to hold that a trust resulted becauseKone was an agent or nominee of the appellants within the meaning ofsection 90 of .the Trusts Ordinance or within the ruling in the case ofRochefoucauld v. Boustead1, both of which were, evidently, in Counsel’s■contemplation when he framed that issue.
This conclusion to which I have come really disposes of the appeal,but in view of the long and interesting argument adduced to us, on bothsides, on the question of trust, I would say a few words about that,i’irst of all, on the facts, it is impossible to entertain the submissionmade to us, in the first place, that there was an express trust. In I) Idrawn up by two Proctor-Notaries the word “ trust ” is not once used.It is difficult to resist the impression that it was studiedly avoided.Not one of the appellants thought fit to testify that there was an under-taking by Kone to hold the land in trust for them. As for the alternativesubmission that there was a constructive .trust, that is to say an obligationin the nature of a trust, I do not see how this case can, on .the materialbefore us, be brought within any of the instances in Chapter 9 of theTrusts Ordinance (Cap. 72) or within any other known instance.
As Lord Atkinson observed in Adaicappa Chetty v. Caruppen Chetty (supra)in these cases, “ the first question which it is necessary to determine iswhat is the real nature, the true aim and purpose of the transaction ” whichis relied upon as creating or giving rise to the alleged trust. In this caseit is not difficult to answer that question; one has only to examine T> 1in which the word “ trust ” is not once used, but in which by clear wordsKone undertakes to sell .the property to the appellants, on payment of acertain sum, within a definitely fixed period, both parties agreeing inexpress terms that time shall be of the essence of the agreement in allrespects, to be satisfied beyond reasonable doubt, that the transaction
1 L. R. (1897) 1. Gh. 196.
Kandavanam and Chelliah.
469
contemplated ispurelyand simply, one forthe future transferof land.
Their Lordshipsof thePrivy Council foundon the'facts reliedupon in
Adaicappa Chetty’s case, that in regard to a part of the agreement set up,there was “ something more resembling a mortgage or a pledge than atrust ” but on the agreement X) 1 relied upon here, such a view of thematter does not seem to be justified. Here the agreement is single andinseparable andcontemplates nothing but asale ofland. But,suppose
this agreementis alsocomparable to thatin thePrivy Council case,
still on either hypothesis, the appellants fail for, in both cases, the agree-ment is of no force or avail in law. Their appeal, on the facts relied uponby them, must fail unless we were free to hold that a trust of some hindor other should be found, on compassionate grounds, to rescue them froman evasion of, or a failure to comply with the relevant provisions of theFrauds and Perjuries Ordinance.
I would dismiss the appeal with costs.
Jayetileke J.—A agree.
Appeal dismissed.