( 270 )
Present: Fisher C.J. and Akbar J.SOMASUNDERAAI CHETTY et al. v. VANDER POORTEN.
174—D. C. Colombo, 20,662.
Contract—Transfer of land settled by :Crown—Purchase money providedby transferee—Agreement to recoup by sale of land—Oral evidence
to contradict agreement—Trust—Action for reconveyance.
The plaintiffs transferred a land settled on them by the Crown tothe defendant, who provided them with the funds necessary topurchase the land from the Crown. A contemporaneous notarialagreement was entered into between the parties by which thedefendant“ held and stood possessed ofthesaid land as absolute
owner and withfullpower andauthority tomanage andcontrol
the sameto put the said lands to such use as he
shall think fit in his absolute discretion and to sell the lands forthe bestavailableprice . . . andtoapply all themoneys
realized by him in respect of sale, in payment of such sums as shallbe due and payable to him for moneys advanced to the Crown andmoneys expendedonthe management, control,and workingof the
said lands . .. andBhallpay over the balance pro rata
according to their respective interests ” to the plaintiffs or theirsuccessors in title.
Held,that therelationship createdbythe agreementwas a
contractual one and not of trustee and cestui que trust, and thatno oralevidencewas admissible to contradict the termsof the
Held further, that the plaintiffs were not entitled to ask for areconveyance ofthelandonpayment ofthe purchasemoney
or for an accounting till the land had been sold by the defendant.
HE paintiff6 sued the first defendant for breach of contractwith respect to a land purchased by them from the Crown or
alternately as a trustee. It was alleged that the plaintiffs acquired
( 271 )
a right to have a tract of land, 14,000 acres in extent, conveyed tothem by the Crown on the payment of a sum of Bs. 275,000. Thedefendant at the request of the plaintiffs provided them with fundsto purchase the properly, which was subsequently transferred bythem to the defendant.
At the same time a notarial agreement was entered into betweenthe parties by which the conditions under which the property wastransferred were set out. It provided that the first, defendantshould stand possessed of the property as owner, should be atliberty to sell the land at a certain price, and after .such sale shouldapply the moneys realized in payment of the loan due to him and ofall moneys spent by him in the management and control of the land.The plaint averred that the defendant had failed to sell the land asarranged, and that the plaintiffs- were ready and willing to repayall sums given and expended by him. They asked for a declarationthat they were entitled to reconveyance of the land on paymentof the said sum of money.
The. plaintiffs claimed in the alternative that the defendant wasa trustee for them. The defendant alleged in his answer thathe has duly performed and is willing to perform the terms of theagreement, and that no cause of action had accrued to the plaintiffsand that, until he had sold the lands, the action was premature.The learned District Judge held that the defendant held the propertyin trust for the plaintiffs and that they were entitled, on paymentof the money due, to demand a reconveyance of the property.
H. V. Perera (with him J. R. V. Ferdinands), for first defendant,appellant.—There is no trust; the terms of the agreement betweenthe parties are embodied in the document P4. The rights andobligations arising upon this document are purely contractual;that document does not disclose any trust.
Oral evidence of intention, acts, or conduct is not admissible tocontradict, vary, or add to the terms of the document P4. Counselreferred to section 92 of the Evidence Ordinance, Balkishen Das v.Legge,1 Balkishen Das v. Narain2 and Rama Raju v. SabhaRaju.3
The trust alleged by the plaintiffs-respondents must be embodiedin a notarial document. Counsel referred to Ordinance No. 7 of1840 and Adaicappa Chetty v. Camp pen Che tty.*
In any event no cause of action had accrued to the plaintiffson the date of institution of action; the action is premature.
Hayley, K.C. (with him Francis de Zoysa, K.C., and N. E. Weera-sooria).—The document P4 must be construed with' reference to allthe circumstances. The conduct of the respondent subsequent
Somasunde-ram Chettyv. Vander
1 22 All. 149.3 30 Cal. 738.
3 25 Mad. 7.
« 22 N. L. B. 417.
Somaeunde-ram Chetty‘ t>. VanderPoorten
( 272 )
to the execution of P4 shows that he admitted that he was. atrustee; an examination of the language of P4 shows that there wasno absolute conveyance in favour of the defendant-appellant.
Oral evidence of intention and conduct is admissible. Counselcited the following authorities: Nanayakkara v. Andris,l Banasinghev. Fernando.2
H. V. Per era, in reply.—Oral evidence as to subsequent conductis not admissible. Counsel referred to Woodroffe and Ameer AJi sCommentary on the Indian Evidence Act, s. 92.
March 12, 1930. Fisher C.J.—
In this case the original plaintiffs sued the defendant, the presentappellant, claiming that he was under liability to them by reason ofa breach of contract or alternatively as a trustee. The subject-matter of the action, a tract, of land 14,000 acres in extent, wasvalued by the plaintiffs in the plaint at Rs. 1,852,522. The interestof the plaintiffs is now vested in the first, respondent to the appeal.The second respondent was made a defendant in the action by theplaintiffs. He is only concerned in this appeal in respect of an orderfor costs.
The history of this case is as follows:—By an agreement with theCrown which is embodied in a decree dated March 28, 1923, certainpersons, amongst whom were the original plaintiffs in the action,acquired a right to have the lands in question conveyed to them bythe Crown “ provided that a sum of Rs. 275,000 is deposited withthe Settlement Officer within 12 months of this date. ” OnMarch 27, 1924, the persons entitled to exercise the right of pur-chase found themselves unable to pay the purchase money. Theytherefore went in a body to the appellant, who prior to that datehad expressed himself as unwilling to advance them any money forthe purpose of effecting the purchase, and made a final effort toget his assistance. The situation was desperate and they putthemselves entirely in the hands of the appellant. In the resulttheir efforts were successful, they harsded over to the appellant thesum of Rs. 64,000 which they had raised amongst themselves, theappellant gave them a cheque for Rs. 275,000 and the purchasemoney was paid into the Treasury within a few minutes of theexpiration of the time within which it bad to be paid. The benefitof the decree was assigned to the appellant on March 29, 1924,and the assignors covenanted (* that in the event of the Crownrefusing to issue a Crown grant in favour of the said A. d VanderPoorten and issuing a Crown grant in their favour the assignorswill immediately thereafter execute a conveyance of the saidland in favour of the said A. J. Vander Poorten. ” The Crowndeclined to issue a Crown grant in favour of the appellant, and on
1 23 N. L. R. 193.
* 24 N. L. R. 170.
( 273 )
March 2, 1925, two documents (P3 and P4), which for the purposesof .these proceedings have been treated as inseparable, were executed.By P3 the lands in question were transferred to the appellant andby P4 the conditions upon which the property had been transferredto him were set Out. The appellant entered into possession of theproperty and spent considerable sums on its development. Mean-while, those who had conveyed the property to him executed adeed (P2) defining their various interests. To this document theappellant was not a party. There were various dealings by thetransferring parties with their interests, and some efforts were madeon their behalf to get a purchaser for the property. The appellanttoo, by a document dated July 27, 1926, gave, an option, exercisablewithin 18 months, to purchase the property to the second respondentto the appeal. Certain correspondence passed between .the partiesand on July 29, 1926, the plaintiffs brought the present action.The plaint sought to fix the defendants with liability “ for havingfailed to sell or arrange the sale of the said premises and the plaintiffsbeing ready and willing to repay to the first defendant the said sumof Rs. 205,840 together with reasonable compensation and profitand moneys expended as aforesaid, the plaintiffs have called uponthe first defendant to reconvey the said property to the partiesdescribed in the said agreements 471 and 472 (P3 and P4), but thefirst defendant has refused so to do unless he receives in additionto the said sum of Rs. 205,840 a sum of Rs. 294,160 and has failed,t.o render any account of the moneys expended by him as aforesaid.(See paragraph 5 of plaint.) The plaintiffs alternatively claimedthat the appellant was a trustee for them. They said that (paragraph12) “ the property is now reasonably worth Rs. 150 per acre, "and (paragraph 13) that the appellant " fraudulently and in breachof trust aforesaid is attempting to effect £ fictitious sale to a nomineeof his at a price less than the market price with the object of securingthe said property for himself and is further preventing a sale at abetter price by the plaintiffs. ” The appellant in his answer saidthat he had duly performed and is willing to perform the terms ofthe agreement set out and that no cause of action had accrued tothe plaintiffs against him. In conclusion he alleged that no causeof action could arise against him until he sold the said lands andthat the present action was therefore premature.
The learned Judge of the District Court gave judgment in favourof the plaintiffs. He held inter alia that on payment of the moneydue to the appellant the third and fifth plaintiffs were entitled todemand a reconveyance of the property; that the appellant heldthe property in trust for the plaintiffs; that the appellant hadfailed to sell the property in terms of the agreement; and that theaction was not premature, and he ordered the appellant to filean account.
Somaaunde-ram Chettyv. VanderPoorten
( 274 )
Somasunde-ram Chattyv. VanderPoorten
The present first respondent to the appeal is the legal personalrepresentative of Somasunderam Chetty, deceased, who sued asthird and fifth plaintiffs in two capacities.
The question for our decision is with regard to the effect of P4.That document after reciting inter alia, that the appellant has“ provided funds and assisted the parties of the second part todeposit with the Settlement Officer the purchase money for theconveyance to them by the Crown of the lands ” in question and that4 4 thes parties of the second and third parts have required the partyof the first part to enter into these presents and declare theirinterests in the said premises ” proceeded as follows:— “ Nowknow Ye and these presents witness that the party of the . firstpart shall hold and stand possessed of the said land as absoluteowner and with full power and authority to manage and controlthe same, to fell, remove, and dispose of the timber therein andput the said lands to such use as he shall think fit in his absolutediscretion, and to sell the said’ lands for.the best available pricewith or without the timber .therein—such price to be in his absolutediscretion provided that if the price is less than Rs. 100 per acrehe shall obtain the; approval of the parties of the second part for suchsale—and to apply all moneys realized by him in respect of the saleof such timber and of the said lands or any portion thereof inpayment of such sums as shall be due and payable to him for moneysadvanced to the Crown for the said purchase from the Crown andmoneys expended on the management, control, and working of thesaid lands as aforesaid and of such compensation or profits for himselfas he shall think reasonable and equitable in his own discretionand shall pay over the balance pro rata according to their respectiveinterests amongst the said parties of the second and third partsor their successors in title and such other person or persons and shallhave a legal claim to or interest in the said lands, provided howeverthat it shall not be obligatory on any purchaser from the party ofthe first part to see to the application of the purchase money, bythe said party of the first part in manner herein provided andreceipt by him shall be full and complete discharge to such purchaserfrom the payment of such purchase money/’
This document was notarially executed and was stamped with aRs. 10 stamp.
Evidence of subsequent acts and of other documents subsequentlyexecuted was tendered on behalf of the plaintiffs at the trial inorder to show the relationship of the parties and the interest of theplaintiffs in the land after the transfer. For the appellant it wascontended that this evidence was inadmissible and that P4 alonecan be looked at for the purposes of ascertaining the rights of theparties.
( 275 )
In my opinion the latter contention is correct and I do not thinkthat the judgment accords with the situation created by P4. Sofar as the questions arising in this case are concerned, I think P4is self-explanatory and we cannot have resort to matters which tookplace after it was executed for the purpose of determining jbhe rightsof the parties. The document itself and the evidence of thecircumstances incidental to its execution clearly indicate that P4was intended to definitely set out the rights of the parties. Inmy opinion the relationship created by that document is not tha.tof trustee and cestui que trust but is purely contractual. Nor doI think it is correct to regard the land as being a security for a debt.By P8 the transferors parted with all their interests in the land itselfand P4 contains no agreement by the appellant to reconvey. P4undoubtedly put the appellant in a very predominating position.It was almost as if he had said -* * Transfer .the property to me and
trust to my generosity/' The appellant, however, has not takenup that position. He admits that he is under a contractual obliga-tion to the first respondent, and I think the only question is whetherat .the time the action was brought he had committed a breach ofcontract. By P4 he is obliged to sell at some time, but as regardsprice his discretion is unfettered provided he sells at not less thanEs. 100 an acre. It is, of course, quite as much to his interests asto that of the respondent to get a good price for the property,but inasmuch as the matter of price is entirely within his discretionin the absence of proof of anything amounting to fraud the firstrespondent does not seem to have any say in the matter. Theappellant is entitled to say ” this :s my property, to be sold at anyprice I think reasonable provided it is not less than Es. 100 an acre/'
The agreement P4 is dated March 2, 1925, and the action wasbrought on July 29, 1926. Can it be said that it is unreasonablenot to have sold a property of this character within a period of alittle over 16 months? There can be no doubt that the appellanthas endeavoured to sell the property. A witness for the plaintiffsaid 11 I believe he has been trying to sell the property.” A witnesswas called by the plaintiff who deposed that he was in the processof considering the desirability of buying the property but beforehe could do anything ” litigation started and there the matterended.”
In my opinion no failure to sell has been proved against theappellant which would constitute a breach of P4, and he had there-fore not been guilty of a breach of contract at the time the actionwas brought. Inasmuch, however, ’ as he admits in his answerthat he is under some contractual obligation to the respondent itis to be hoped that the parties will see their way .to ■ elucidate thequestion of the exact nature and extent of that obligation bynegotiation.
Soma9unde*ram Chetlyv. VanderPoorten
( 276 )
1980. The decree will be set aside and judgment will be entered dismiss-Fisher G.J. *n8 the action with costs as against both the defendants. The—- respondent will pay the second defendant’s costs in .the Court below^tw^Chmy UP to and including July 81, 1928, and also the costs of this appeal,f. Vander
This is an appeal from the order of the District Judge holdingthat the first defendant was a trustee in respect of the property whichis the subject-matter of this action and ordering the first defendantto file an account in respect of it within a month of the date ofthe decree and further ordering the first defendant on receipt of themoney due to him on the accounting to reconvey to the substitutedplaintiff the shares of the third and fifth plaintiffs in the property.To understand the point arising in this appeal it is necessary tostate that by decree entered in a case under the Waste LandsOrdinance, No. 3,656, D. C., Badulla, the Crown agreed to sell tothe plaintiffs in .that case a large tract of Crown land known asThanketiya at the rate of Rs. 20 per acre provided the sum ofRs. 275,000 was deposited with .the Settlement Officer within 12months of the date of the decree, namely, March 28, 1923. Theinterests of the plaintiffs in that case are represented by the plaintiffsand second to the seventh defendants in this case to a large extent andmay for the purpose of this appeal be taken as identical. After variousefforts made by the plaintiffs and the second to .the seventh defendants(hereinafter referred to as the plaintiffs) to raise the sum theymanaged to secure a cheque for the amount from .the first defendanton the very last day the money vas due, namely, March 27, 1924,the plaintiffs providing Mr. Vander Poorten with cheques amountingto Rs. 64,000. The evidence of the first plaintiff in .this case, whoseinterest has since been bought by the first defendant and who haswithdrawn his claim in this case, shows that the first defendant wasat first not willing to lend the money and that in fact it was only byan accident that he consented to give the sum due and that theplaintiffs were in very desperate straits when they pleaded with thefirst defendant for the loan of the money. The material part ofhis evidence on this point is as follows:—“ Before Mr. VanderPoorten handed us that cheque we threw ourselves on Mr. VanderPoorten’s mercy again and he could have dictated and taken anyterms he wanted at that time. We were prepared to accept anyterms bar giving him the whole property. The great point wasthat we should have lost all that we had in the business unless weconsented. We would have lost our property and money as well.No terms were mentioned on that occasion, except that he said thathe would come to our rescue and help us and that we must do ourbest and try to realize this money as soon as possible. He said thathe is not doing this for any personal benefit but that he sees our
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plight and that he would not let the Government deprive us of thisland. He asked Mr. Weerasuriya to look after his interest/*This evidence clearly shows that had it not been for Mr. VenderPoorten coming to the assistance of the plaintiffs the latter wouldhave lost the whole land and the sums that they had already spentin respect of it, namely, nearly Rs. 200,000. Then come two import-ant documents executed on the same day, March 2, 1925, namely,the two documents numbered 471 and 472 and marked P3 and P4.By P3 the plaintiffs conveyed to the first defendant their right, title,and interest in the land, which is the subject-matter of this action.The other document is P4 executed immediately after P3 and issigned by the first defendant, wherein it is recited that the firstdefendant had provided funds and assistance to the plaintiff todeposit the purchase money for the conveyance to the plaintiffsby the Crown of the land above mentioned and that P3 had beenexecuted on the same day, and then the document proceeds 'asfollows:—“And whereas the parties of the second and third partshave required the party of the first part to enter into these presents•and to declare their interests in the said premises:
" Now know Ye and these presents witness that the partyof the first part shall hold and stand possessed of the said land asabsolute owner and with full power and authority to manage andcontrol the same, to fell, remove, and dispose of the timber thereinand put the said lands to such use as he shall think fit in his absolutediscretion and to sell the said land for the best available price withor without the timber therein—such price to be in his absolutediscretion provided that if the pr*ce is less than Rs. 100 per acrehe shall obtain the approval of tlje parties of the second part for suchsale—and to apply all moneys realized by him in respect of the saleof such timber and of the said lands or any portion thereof inpayment of such sums as shall be due and payable to him formoneys advanced .to the Crown for the said purchase from theCrown and moneys expended on the management, control, andworking of the said lands as aforesaid and of such compensation* orprofits for himself as he shall think reasonable and equitable in hisown discretion and shall pay over the balance pro rata, accordingto their respective interests amongst the said parties of the second andthird parts or their successors in title and such other persons orpersons as shall have a legal claim to or interest in the said lands,jtfovided however that it shall not be obligatory on any purchaserfrom the party of the first part to see to the 'application of thepurchase money by the said party of the first part in mannerherein provided and receipt by him shall be full and completedischarge to such purchaser for the payment of such purchase-money.
“ In witness whereof …/* –
Somaaunde-ram Chettyiv VanderPoorten
( 278 )
Somasumfte-ram Gkettyv. VenderPoorten
The first plaintiff’s evidence with regard to this document P4 isas follows:—“Mr. Weerasuriya was acting on behalf of Mr. VanderPoorten with regard to those further arrangements. 471 and 472were executed before the same notary on the same day. All partiesconsented .to the terms of the deeds before they were executed.The terms agreed to by the parties were embodied in the deed. Thedeed 471 (PS) purported to be a deed of transfer! Deed 472 wasexecuted more in the interests of the syndicate. The che.ttiesand others wanted it made clear that they were not going .to givean out-and-out conveyance, and therefore the agreement was signed.The chetties wanted some assurance. They wanted the conditionslimiting the full ownership put down in the deed 472. Mr. VanderPoorten said he did not mind that being done. There was completeagreement between the two parties regarding these two documents.According to the terms of the agreement it was agreed that Mr.Vander Poorten should not sell the property under Rs. 100 an acreunless he got the permission of the syndicate. That is becausewe realized that Rs. 100 was about the lowest possible figure thatcould be put on the property at that time. The market value of theproperty at tha.t time was about Rs. 150 an acre. We expectedMr. Vander Poorten to try and get at least Rs. 150 because the morehe got the more we and he would have been benefited. If he gotmore we would have given him something more. I believe he hasbeen trying to sell the property. I know that even Mr. Meedeniyawho was in England at the time was trying to sell the propertythere.”
The second plaintiffs evidence o*. the same subject is as follows: —“ I was asked to sign an absolute transfer, that is, the deed No. 471.but I objected strongly saying there was no meaning in signing atransfer a second time. I said we had assigned the decree to secureMr. Vander Poorten’s interests, and .that if we signed anothertransfer it will argue against us. Then there was some talk aboutthe Crown grant and I said let there be an agreement to provethat it is not an absolute transfer that is being given and then 1consented to sign the transfer. Therefore the deed 472 was drawnup and both documents were signed at the same time. I was theonly one who insisted that there should be an additional documentand they all agreed.”
He says further on as follows:—” It was I who wanted a contem-poraneous' agreement and he asked me to draft, and I drafted thedeed 472. I drafted it in Mr. Weerasuriya’s office. In doing soI was acting on behalf of myself and the others, because I thoughtthey were erring. The terms and conditions which are in 472were made by all the parties and it was read and explained to them.Documents 471 and 472 were one document and we .thought wohit upon the main features of the contract between the parties.
( 279 )
It is urged for the respondents that the true intention of the 1&20.parties as evidenced by the surrounding circumstances, by the akbarJ.conduct of the first defendant, and even by the very terms of P4,was to create a trust over the property, whereby the first defendant ram cheUywas given the land as security for his loan, but he was to sell the land, v- Vand&rand from the proceeds after recouping himself for the loan and otherexpenses, the balance was to be distributed among the plaintiffs,in the shares set forth in the document P2 (to which, it may be herementioned, the first defendant was not a party). The respondents*counsel then went on to urge that the first defendant had committeda breach of this trust in the manner set forth in paragraphs 5 andIV> of the plaint, and that therefore the respondents as cestuis queirustent were entitled under section 58 of Ordinance No. 9 of 1917to ask for a reconveyance of their shares. The first point that hasto be decided in this case is whether there was a trust as alleged orwhether the .terms of the agreement are confined to the documentP4. On the question of conduct reference was invited to documentsP6 and P7 under which the first defendant bought the interests ofthe first plaintiff and the third defendant in the land after this actionwas started. I do not see why the first defendant’s effort to put astop to the activities of some of his more powerful antagonists, whowere trying to involve him in costly litigation, should be construed asproving the trust in the case of his other antagonists (see Vissanji,
Sons & Bharoocha1). Then reference was invited to the documentsP5 and Pll, and the use of the word “ trustee ” in a letter sent to thefirst defendant by some of the plaintiffs. I fail to see how the use ofthe word “ trustee ” in this letter can be adduced as evidence of con-duct on the part of the first defendant showing that the transactionwas in effect a trust. Lastly, as shown in P12, an action was broughtby the first defendant and some of the plaintiffs in respect of the 1,000acres expressly excluded in P3 and P4. I am unable to appreciatehow first defendant’s conduct with regard to one land can beconstrued as showing the true nature of the transaction relating toanother land.
It is true that the document P4 bears on the face of it certainexpressions which limit the rights of full ownership as evidencedby P3. But when two such formal documents as P3 and P4 aredrawn and executed at the same time one after the other, andespecially when P4 was expressly drafted to conserve the rights ofthe syndicate, one would have thought that P4 was exhaustiveon the subject. In fact the last recital in P4 says expressly that“ the parties of the second and third parts have requested the partyof the first part to enter into these presents and-to declare theirinterests in the premises.” But no, the argument is that the realtransaction is something more than the explicit promise contained
* /. L. R. 36 Bom. 387.
Somaaunde-ram Chettyv. VenderPoorten
( 280 )
in P4 to be performed by the first defendant. I do not thinkthat the respondent is entitled to go behind P4 which has beenstamped as an ordinary deed and not as a trust and to prove a trustby oral evidence of conduct and circumstances, contradicting insome respects the plain terms of P4. P4 declares that first defendantis in possession as absolute owner and that he can fell, remove, andsell the timber in any manner he likes and that he can sell the landat any price he likes, provided that if he proposes to sell the land atless than Rs. 100 per, acre he is to obtain the approval of the partiesof the second part. And after such sale, first defendant is to applyall moneys realized by the sale of timber and of the land in payment ofall moneys due to him on the loan and as the costs of the managementand control of the land; and first defendant is further enjoinedto pay himself " such compensation or profits for himself as he shallthink reasonable and equitable in his own discretion and afterall this has been done, the balance is to be distributed amongst therest. This document makes it cleat: that the plaintiffs had no rightto ask for an accounting till a sale had taken place. To ask, there-fore, for an accounting before a sale had taken place on the footingof a trust and to ask that the property should be reconveyed to theplaintiffs will amount to a variation of the terms of the documentP4. This I think the plaintiffs are not entitled to ask in view ofsection 92 of the Evidence Ordinance (Balkishen Das v. Legge,1Baikishen Das v. Narain Sahu, 2 and A. Rama Raju v. Sabha Raju. 3).
Even supposing there was a trust as alleged, what is the breach oftrust or the cause of action alleged ? They are. said to be indicatedin paragraphs 5 and 13 of the plamt. The alleged defaults on' thepart of the first defendant are (a) that he failed to sell or .arrange asale, (b) that the plaintiffs were ready and willing to repay the sumof Rs. 205,840 loaned and the other sums due and had called onthe first defendant to reconvey the property and that the firstdefendant had refused to comply unless he received a further sumof Rs. 294,160, (c) that first defendant had failed to renderan account, (d) that first defendant is attempting fraudulentlyto effect a fictitious sale.
On the question whether Mr. Vander Poorten has failed to arrangea sale, the first fact that strikes one is that the land in question isover 14,000 acres in extent and is a dense forest in an inaccessibleand malarious place far from .the haunts of men and is valued atRs. 1,852,560. It is not a property for which a purchaser can'readily be found, the plaintiffs themselves having failed to find apurchaser for one year from the date of the decree till first defendantcame to their rescu.e. Mr. Vander Poorten has given evidence toprove that he made every endeavour to sell the property and that
> J. L. R. 22 AU. 149.21. L. R. 30 Cal. 738.
2 I. L. R. 26 Mad. 7.
( 281 )
he failed to get a purchaser. This evidence is corroborated by thefirst plaintiff. He then entered into an agreement, D2, dated July26, 1926—just 3 days before this action was filed—-with the addeddefendant by which the latter was given an option to purchase theproperty at Rs. 150 per acre. As one would expect, owing to thisprecipitous action the option has expired and the proposed salehas fallen through. 1 cannot see how it can be stated that the firstdefendant has failed to sell this property; the date of the agreementis March 2, 1925, the action was filed in July, 1926, and no time limitwas fixed for the sale of the property. As regards the plaintiffs*allegation that they were willing to pay the sums due to the firstdefendant, the truth of this assertion depends on the evidence ofMr. Adamaly, who the plaintiffs say was the purchaser who waswilling to buy the property. On this point Mr.- Adamaly's ownevidence is emphatic. Par from being willing, anxious, and readyto buy the property his evidence was as follows:—“ 1 heard of theland Thanketiya. Certain proposals were made to me by myProctor, Mr. de Witt, to buy the land. I said I would investigatethe matter. I know that a certain sum of money had to be paid toMr. Vander Poorten before the land could be purchased. I did notask my Proctor to find out the amount that had to be paid becauseI was not interested in the amount Mr. Vander Poorten had to get.I was not prepared to pay anything. I was prepared to investigatethe matter and see whether the land was worth. I mentioned thematter to Mr. J. W. Oldfield, and we intended sending a man toreport on the land. Before we could do anything litigation startedand there the matter ended. I d*d not say that Mr. Vander Poortenwas trying to prevent my buying the land. I cannot say that hebrought a case to prevent my buying it. I cannot say if I askedany of the owners to find out what Mr. Vander Poorten wanted.They mentioned the amount they wanted for the land, Rs. 120an acre they said. It was on that basis that I spoke to Mr. Oldfield.Before we could send a man to inspect the place litigation startedand then I was told that nothing can be done. I was not preparedto bring any money into Court at any time. I could not do anythingbefore I found out what the property was worth. I knowMr. Vander Poorten. I would not say he is a friend of mine. Hediscussed this matter with me. On the last date when I cameto give evidence he came and spoke to me.
“ About a month or two before the action started they came andasked me to buy it. I do not deal in timber lands ordinarily.I would not touch this land until I get a report on it. Mr. Oldfieldis a very well known planter. He is the director of Messrs. Lee,Hedges'& Co. Until I get a report from a responsible person Iam not prepared to make any offers or pay any money. The wholething was in the air and nothing definite.**
SomaautuU-ram Ghettyv. VanderPoorten
( 282 )
Somasunde-ram Chettyv. VanderPoorten
In these circumstances, it is only a vivid and oversanguine imagin-ation that can construe Mr. Adamaly's evidence as that of a willlingand anxious purchaser, ready to buy the property whose anxietywas damped by the intrigue and impossible conduct of the firstdefendant. It is argued on this evidence of Mr. Adamaly thatthe plaintiffs wrote letter Pll to the first defendant, and the latter’sreply P5 is set forth before us as indicating first defendant’s unwilling-ness to account and as showing that his demand for Rs. 500,000was unconscionable. As a matter of fact the first defendant hasfiled his timber account (see D3); and his claim to be repaidRs. 528,177.23 in respect of the loan, and his working expenses andinterest cannot be construed as unconscionable in view of the factthat by P4 the first defendant was given a free hand to charge anysum as “ compensation or profits for himself as he shall think reason-able and equitable in his own discretion. ” 1 cannot conceive howa casual letter like P5 can be interpreted as a refusal to account andas indicating an inequitable and excessive demand in view of thefact that the actual sum due to him is over Rs. 500,000 and iscalculated on a basis which appears to be reasonable in all thecircumstances.
It appears to me that the first defendant was right when hepleaded that no rights could accrue to the plaintiffs till the propertyhad been sold and that this action was premature. In my opinionthere was no such trust as is contended for by the respondents.How uncertain the respondents were as to the exact terms of thisalleged trust is proved by the contrast in the trust alleged in theplaint and the trust put forward by counsel at the hearing of thisappeal. In paragraphs 5 and 10 of the plaint it is alleged that thetrust was to reconvey the property to the plaintiffs on paymentof Rs. 205,840 and first defendant’s working expenses and reasonablecompensation and profits.If this is thetrustalleged, it will
not only require a notarialdocumentforitsvalidity (see Adicappa
Chatty v. Garuppen Chetty 1 and Arseculeratne v. Perera 2) but it willbe in direct contradiction of the plain terms of P4. It was to meetthis difficulty I think that respondents’ counsel was obliged to arguethat there was a failure of the trust in that first defendant refused toaccount and that he was attempting to commit a fraud as set outin paragraph 13 of the plaint. On these two allegations it wasargued that the plaintiffs as cestuis que trustent were entitled to clainta reconveyance in termsof section58oftheTrust Ordinance,
No. 9 of 1917.- As I haveexplained,theevidenceshows that there
is no truth in the allegation that the plaintiffs were prepared topay the amount due to the first defendant. They have not offeredever to pay any sum nor have they brought any money into Court.What they are trying to do is to ask for an accounting before such> 22 N. L. R. H7.2 28 N. L. R. 1. .
accounting is due in law. Such an accounting is going to lead tonothing, except, perhaps, to worry the first defendant and to forcehim to come to terms with the plaintiffs—a manoeuvre which seemsto have succeeded so far as some of them are concerned. J wouldhold that there was no trust and that the terms of the agreement areconfined to P4. I would hold further that no cause of action hasaccrued to the plaintiffs, that the action is premature, and that theplaintiffs' action should be dismissed with costs in both Courts.They should further pay the costs in both Courts of the added-defendant.
Somasundt-ram Chettyv. VanderPoorten