011-NLR-NLR-V-25-SILVA-v.-CORNELIA-et-al.pdf
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Present: Schneider J.
SILVA t>. CORNELIA et ah61—C. R. Galle, 11,360.
Paulian action—Civil Procedure Code, s. 247—Sale by uncle to niece—Possession by «ncle-r~Prim& facie proof of fraud—Burden ofproof of bona fides—Debtor owning another land after sale ofimpeached deed-—Sale of the other land also to daughter withinthirteen days of the date of first deed.
Plaintiff brought an action under section 247 of the CivilProcedure Code against the successful claimant (first defendant)and the judgment-debtor (second defendant), praying, inter aliathat the deed by the second defendant in favour ef his niece, thefirst defendant, be set aside as having been executed in fraud ofcreditors. The Commissioner of Requests dismissed the actionwithout allowing evidence to be led, as the judgment-debtor ownedanother land at the time he executed the impeached deed, andas, therefore, he could not be said to have made himself insolvent.The judgment-debtor sold this land also within thirteen daysof the date of the impeached deed to his daughter.
The Supreme Court sent the case back for further evidence.Schneider J.—“ The fact that the second defendant has soldthe house to his own daughter within thirteen days of the date ofthe impeached deed appears to me to point to both transfers asbeing attempts to put his assets beyond the reach of his creditors.’*41 The fact that the first defendant is the niece of the second. defendant, and that the second defendant has continued to liveupon one of the lands sold, are primd fade indications that thesale was fraudulent. Those facts being proved it was incumbenton the first defendant to prove the bona fides of the transaction.”
'jpHE faots are set out in the judgment.
E. 0. P. Jayatilleke, for appellant.
M.W. H. de Silva, for respondents.
June 22,1923. Schneider J.—
The plaintiff, appellant, being the judgment-creditor in actionNo. 1,054 of the Additional Court of Requests of Galle, seizedcertain undivided shares in three allotments of land as beingthe property of his judgment-debtor, the seoond defendant. Thefirst defendant claimed the shares seized by virtue of a deedNo. 24,790 exeouted by the second defendant in her favour datedJanuary 27, 1919. Her claim was upheld, and the plaintiffbrought this action under section 247 of the Civil Procedure Codeto have the said deed set aside upon the ground that it had beenexeouted in order to defraud the plaintiff, and that it was exeoutedwithout consideration and in collusion between the second defendantand the first defendant.
In her answer the first defendant denied the allegations as tofraud and oollusion, and pleaded that the second defendant hadnot rendered himself insolvent by the impeached sale. The trial
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1923.
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1928.
SCHNEIPFR
J.
iSilva c.Cornelia
proceeded upon the two following issues agreed upon by bothparties :—
Was-the deed in question executed fraudulently in collusion
with the first defendant in order to defraud the plaintiff ?
Did the Becond defendant render himself insolvent by
granting this deed ?
The evidence on behalf of the plaintiff is that the seconddefendant is the uncle of the first defendant, and that the seconddefendant Is living on one of the lands, the shares in which wereseized, and is still taking the produce. The manager of theplaintiff’s business valued the house, in which the second defendantwas living at Rs. 100 to Rs. 160. The Fiscal’s Arachchi, who wasnext called, valued it at Rs. 250. At this stage of the trial whenplaintiff’s counsel moved to read deed No. 24,805 in evidence toshow that the house had been conveyed by the judgment-debtorto Johana, his own daughter, the learned Commissioner would notallow further evidence to be called, as he thought it was unnecessaryto do so. He gave a week’s time to produce the deed, and recordedthat if the deed was subsequent in date to the sale of the shares tothe first defendant that the plaintiff, loses his case. The deedwas subsequently produced. It is said to be dated January 19,1921. There is no translation of the deed. The Commissionerthereupon dismissed the plaintiff’s case. He has appealed. TheCommissioner does not say why he thought it unnecessary thatfurther evidence should be called. I am inclined to think thathe thought that as the judgment-debtor owned the house, whichwas valued at Rs. 250 at the time he executed the deed impeachedin this action, he could not be said to have made himself insolventby the execution of the impeached deed. The Commissioner wasnot justified in refusing to allow the plaintiff to lead further evidence.There are two distinct issues. The issue as regards fraud couldnot be determined before the plaintiff had placed all his evidencebefore the Court. The fact that the first defendant is the nieceof the second defendant, and that the second defendant has con-tinued to live upon one of the lands sold, are primd facie indicationsthat the sale was fraudulent. Those facts being proved, it wasincumbent on the first defendant to prove the bona fides of thetransaction. The plaintiff, therefore, was entitled to lead evidenceupon this issue. The learned Commissioner was also wrong inshutting out further evidence on the second issue. The evidenceas to the value of the house was conflicting, it being said that itwas worth Rs. 100 or Rs. 250. The plaintiff held a judgment forRs. 200, with writ and costs. What that amounted to at the timeof the trial was proceeding has not been ascertained. If a housewas worth Rs. 100, or its-value was insufficient to satisfy the firstdefendant’s claim, the plaintiff would be justified in saying thatthe execution of the impeached deed rendered his debtor insolvent,
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because by the execution of that deed he was left without sufficientassets to satisfy his debt. The fact that the second defendant hassold the house to his own daughter within thirteen days of thedate of the impeached deed appears to me to point to both transfersas being attempts to put his assets beyond the reach of his creditors.
I set aside the judgment appealed from on the ground that theplaintiff should have had an opportunity to place all his evidencebefore the Court. The first and third defendants must pay theplaintiff his costs of the trial already had and of this appeal. Therecord is remitted for trial as from the stage at which the plaintiffwas stopped from leading further evidence. If the Commissionerwho tried the case is not able to proceed- with the'further evidence,there should be a trial de novo.
Set aside.
1923.
Scbnbtdbb
J.
Silva v.Cornelia