082-NLR-NLR-V-19-SOYSA-v.-SOYSA-et-al.pdf
( 814 )
1916.
Present : Wood Benton O.J. and Shaw- J.
SOYS A v. SOYSA et aX.975—D. 0. Colombo, 40,906.
Donation by uncle to nephew, who was a minor—Deed accepted by 'father ofminor—Action to set aside deed on the ground of undue influenceand unsoundness of mind—Aooeptoe of deed standing in a ' positionof active confidence towards donor when deeds were executed— .Burdenofshowing honestyof impeached transaction—Communi-
cation made by olient to proctor—Is it admissible in1 evidence J—Evidence Ordinance, ss. Ill and 186.
S,
Under . theBoznui'DDtoh law a contract made by an insane
person—and under that law a donation iB closely assimilated to' acontract—is absolutely void) and the doctrine of undue influencedoes not seem to be recognized except in the form of dares a, orwhat the authorities describe as fear.
Under the English law a contract is voidable if one contractingparty is to the knowledge of the other incapable, by reason ofunsoundnesa of mind, of understanding the nature and quality ofhis act $theburden ofestablishing unsoundness of mind ofthin
character is imposed upon the party alleging its existence. Themere presence of delusions, even if they are not altogether un-connected withthesubject-matter,doea not,ipsojure, destroy
contractual capacity, unless the delusions constitute the real motifof the transaction. Where a donee either stands in one of certainrecognized relationshipstowards thedonor, suchas parent and child
or solicitor andclient,or is shownby the evidence tohave been in
a position of active confidence towards him, the burden of provingthat thegiftwas the voluntary act of the latterwill restuponhim,
and thedonation cannotbe maintained unlessit appearsthatthe
donor had independent advice. There may be mental conditionswhich fall short of insanity, but which may be productive of afacility of disposition over which undue influence might veryreadily be exercised with effect. ■
8haw J.—Inorderto create aposition ofactiveconfidence, it
is not necessary for one of the usual relationships of solicitor andclient, guardian and ward, parent and child, 6c., should exist, andthere »noreason whyone brother should notstand toanother in
such a position. Every case must depend upon its particular facts.
pjl HE facts are set out in the judgment.A. St. V. Jayawardene (with him Zoyaa and D. Obeyeaekere), forappellant.
Bawa, K.C. (with him EUiott, Samarawickreme, B. F. de Silva, .and 0. H. Z. Fernando), for respondent.
Cur. adv. vult.
( 315 )
December 20, 1916, Wood Benton C.J.—1W6i
In this action the plaintiff sues the defendants to set aside two—;—
deeds of gift, Nos. 605 and 606, dated May 81, 1912, executed byhim in favour of the second defendant. The plaintiff is the youngerbrother of the first defendant, who is the father of the second. Atthe date of the execution of the deeds in question the seconddefendant was a minor, and the first defendant, therefore, acceptedthe gifts on his behalf. They were subject to a reservation of a lifeinterest in favour of the plaintiff himself, and their subject-matterconsisted of lands alleged to be of the value of Rs. 245,000. Thegrounds on which the two deeds were impeached in the originalplaint were (a) that at the date of their execution the plaintiff was,to the knowledge of the first defendant, subject to delusions and ofunsound mind, and incapable of understanding the effect of. thetransactions into which he was made to enter; (b) that at the saiddates the first defendant was acting as the plaintiff’s attorney, andin a position of “ active confidence ” towards him, and had himunder, his sole charge, care, and control; and (c) that the deeds weregifts, mortis causa, made in contemplation of the death of theplaintiff from a disease from which he subsequently recovered. Noissue was suggested by the plaintiff's counsel at the trial as regardsthe last, of these allegations, nor was any reference made to it atthe trial or on the argument of the appeal. It must, therefore, betaken to have been tacitly abandoned. The learned District Judge,on an objection by counsel for the defendants, held that, as theplaintiff had not specifically alleged that the first defendant hadfraudulently taken advantage of his position in the matter of theexecution of the deeds, the plea as to the relation of active confidencebetween them contained no statement of facts on which an issuecould be' framed. But the Supreme Court on a previous appealreversed this decision and allowed the plaint to be amended, so asto raise the issue of undue influence between the parties. Theonly use that the defendants’ counsel made of this incident on thehearing of the present appeal was to argue that it showed that theplaintiff had not been prepared at the outset of the litigation tomake a bold allegation of undue influence. I do not myself attachany weight to this argument. The original plea was clearly foundedon section 111 of the Evidence Ordinance, 1895,1 which providesthat “ where there is a question as to the good faith of a transactionbetween parties, one of whom stands to the other in a position ofactive confidence, the burden of proving the good faith of thetransaction is on the party who is in a position of active confidence.”
The plea has no meaning unless it is interpreted as containing animplied allegation of undue influence. The defendants in theiranswer denied that the plaintiff was of unsound mind at the critical
1 No. 14 of 1895.
1916.
' WoodRbistonC.J.
Soyaa v.Soyaa
(316 )
period, or that- the first defendant had procured the execution ofthe impugned deeds by undue influence. The case went to trial onthose issues. The learned District Judge decided each of them inthe defendants* favour, and dismissed the plaintiff’s action withcosts. Hence this appeal.
The questions for determination are whether, at the date of theexecution of these instruments, the plaintiff was of unsound mind,or, in the alternative, was induced to execute them by the undueinfluence of the first defendant. Under the Roman-Dutch law acontract made by an insane person—and under that law a donationis closely assimilated to a contract—is absolutely void (Molyneuw v.Natal Land and Colonization Company, Limited1), and thedoctrine of undue influence does not seem to be recognized exceptin the form of duress, or what the authorities describe as " fear.”*The present appeal was, however, argued before us with specialreference to the rules of English law,' and the law of Englandapplicable to the decision of the issues that have here to be disposedof has long been settled. A. contract will be voidable if one con-tracting party, at the time of making it, is to the knowledge of theother incapable, by reason of unsoundness of mind, of understandingthe nature and quailty of his act8; the burden of establishingunsoundness of mind of this character is imposed upon the partyalleging its existence. The mere presence of delusions,4 even ifthey are not altogether unconnected with the subject-matter,5does not, ipso jure, destroy contractual capacity, unless the delusionsconstitute the real motif of the transaction.. Where a donee eitherstands in one of certain recognized relationships towards the donor,such as parent and child or solicitor and client, or is shown by theevidence to have been in a position of active confidence towardshim, the burden of proving that the- gift was the voluntary act ofthe latter wiil rest upon him,, and the donation cannot be maintainedunless it appears that the donor had independent advice.5 Theremay be mental conditions which fall short of insanity, but whichmay be productive of a facility vof disposition over which undueinfluence might very readily be exercised with, effect. In the view,however, that I take of the facts of the present case, it is immaterialwhether the evidence be considered from the standpoint of Roman-Dutch or English law.
[His Iiordship set out the facts at length and discussed the evidenceand continued] : —
On the contrary, the vivd voce evidence called on behalf of thedefendants is corroborated by a body of, letters written by the
1 (1905) A. C. 555.4 Banks v. Goodfellow, (1870) hi
Nathan, vol. IV., s. 2171.B. 6 Q. B. 549.
See Imperial Loan Co. V- Stone,4 Jenkins v. Morris, (1880) 14 Ch.
(1892) 1 Q. B. 599.D. 674.
• See Huguenin v. Baseley, (1807) 14 Ves. Jim. 728, 1 Wh. & T. 274; andthe notes to the latter reDort.
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plaintiff to various parties covering the whole critical period, andpointing decisively to the conclusion that he was perfectly capable Woodof ^understanding, and did understand, and voluntarily approve of, Bhntox C.J.the deeds which he nowseeks toset aside. The learnedDistrictsoyaav.
Judge has examined thesedocuments in detail, and I do notproposeSoysa
to repeat what he has said about them. They show 'further thatplaintiff’s statement that he – was unaware of the execution ofthe deeds of gift .till themeetingon March 10, 1914, to which 1
have already referred, isuntrue.Mr. Perera stated thaton the
morning of that day the plaintiff came to his office and asked himto show his proctor, Mr. Abeywardene, the deeds that he hadexecuted in favour of the second defendant, and that at the meetingitself the plaintiff said that he had very little concern in the matteras he had only a life interest in the property. In support of Mr.
Perera’s evidence as to the plaintiff’s mental capacity on May 81,
1912, the defendants’ counsel produced, and the District Judgereceived in evidence, certain notes (D 42 and D 48) made by Mr.
Perera of the instructions given to him by the plaintiff. In viewof the provisions of section 126 of the Evidence Ordinance, 1895,1it appears to me to be open to grave doubt whether such portionsof the instructions in question as are in the nature of communicationsmade to Mr. Perera by his client can be legal evidence in the case.
I have not myself looked at these productions. But there can, ofcourse, be no valid objection to Mr. Perera’s statement that theplaintiff was able to give, and did give, him precise and reasonableinstructions with regard to the two deeds executed by him onMay 81, 1912. The plaintiff’s case on the issue of unsoundness ofmind or delusional insanity fails.
I have already dealt with the evidence in such detail as to rendera decision on the issue of undue influence a matter of little difficultyso .far as the merits are concerned. The sheet anchor of the appealon this point was the fact that the first defendant did not comeforward as a witness on nis own behalf. Bad he done so, fresh lightwould undoubtedly have been thrown ujpon the case. Bis counselinformed us, however, that he had advisedly abstained from callinghis client, as he did not consider that on the issue of undue influencethere was any real evidence against him, and that to have, in suchcircumstances,- allowed the first defendant to be subjected to cross-examination, not only would have been • needlessly painful to himslf,-but would have gone far to prevent any future reconciliation withhis brother. Bere, again, we must be content to take the case asit stands. The plaintiff’s counsel contended that the facts thatat the critical period his client had constituted the first defendanthis attorney, that in the power of attorney the common form ofstatement that, the principal was about to leave the Island had beenstruck out and a special clause inserted to the effect that no person
i No. 14 of 1895.
( 318 )
.1916.'Aftoling with the attorney or his substitute orsubstitutes should be
/ Woodrequired to ascertain whether it had ceased tobein force from any
Rhntoh C.J.cause whatsoever, or to inquire, whether heorthey were acting
Soyaa vwithin the scope of the authority conferredbyit, and that the
Soyaa first defendant had complete control over the movements of theplaintiff at the time, created a relation of active confidence withinthe meaning of section 111 of^the Evidence Ordinance, 1895/between them, and imposed upon the first defendant the duty ofshowing the honesty of the impeached transaction. The defendants*counsel maintained, on the other hand, that the execution of thedeeds of gift was not a “ transaction within the meaning of thesection just mentioned; that the circumstances disclosed no relation-ship of active confidence between the plaintiff and the first defendant;and that, even if it did, the burden of proving the good faith of thetransaction had been amply discharged.
The first defendant was himself a party, as acceptor of the dona-tion on behalf of his minor son, to each of the deeds in question, andthe execution of those deeds was, in my opinion, a “transactionin the statutory sense of the term. But the special clause, to whichour attention has been directed in the power of attorney, may wellhave been intended merely to protect the attorney and personsdealing.with him for valuable consideration on faith of the power,2and I doubt whether it results from any of the authorities cited tous that, in such circumstances as the present, a relationship ofactive confidence will arise, unless the person said to stand to thedonor in that position has had something to do with the bringingabout of the transaction itself. Certainly the case of Sital Prasad v.Parbhu Lai,3 on which the plaintiff’s counsel relied in this connection,does not support any such proposition. In that case there is aspecific finding that the party alleged to have used undue influencehimself obtained the execution of the impugned deeds. Be that asit may, however, even if the onus probandi under section 111 of theEvidence Ordinance, 1895/ rested on the first defendant, it has,I think, been discharged by the large body of evidenc, viva voceand documentary, which I have already considered, and whichshows that the execution of the deeds in question was a free willact on the part of the plaintiff himself. The first defendant wasnot bound to go into the witness box. He was entitled to dischargethe burden of proof esc hypothesi imposed upon him by reason ofhis position of active confidence towards the plaintiff, in any waythat he chose, and he has done so successfully. Mr. Perera statedthat he had not told the first defendant about the execution of thetwo deeds till they were ready for signature, and that all that the
i No. 14 of 1895.
a Elliot v. Ince, (1857) 7 De G. M. & G. 475; and cf. Daily TelegraphCo. v. McLaughlin, (1904) A. C. 776.
* (1888) /. L. R. 10 All. 635.
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first defendant had done was to accept them formally for the1016.
benefit of his son. Mr. Perera was, in my opinion, the plaintiff’sWooj>
independent adviser within the meaning of the well-known English Renton C.Jauthorities on this branch of the law.Soysa v.
I would dismiss the appeal with costs.Soysa
Shaw J.—
This action was brought to set aside two deeds of gift made bythe plaintiff in favour of the second defendant, on the grounds,first, that the plaintiff was, at the time he executed the deeds, ofunsound mind and incapable of understanding their contents; and,second, that he was induced to execute the deeds by the undueinfluence of the first defendant.
By the deeds in question the plaintiff gifted to the seconddefendant, an infant, who was his nephew and godson, a numberof valuable properties, reserving to himself a life interest, and thegift was accepted by the first defendant, who was an elder brothet- of the plaintiff, on behalf of his son, the second defendant.
Two issues only were contested in the District Court: —
Was the plaintiff incapable of understanding the effect of
the transaction impeached in this case, namely, theexecution of the deeds 605 and 606 of May 31, 1912?
Was first defendant in a position of active confidence
towards the plaintiff when deeds 605 and 606 wereexecuted, and was their execution obtained by theexercise by the first defendant of undue influence?
The learned District Judge has answered both the issues in thenegative, and the plaintiff has appealed ……..
With regard to the issue of undue influence, it was contendedthat the evidence showed that the first defendant, at the time thedeeds were executed, stood in a position of active confidence to theplaintiff within the meaning of section 111 of the Evidence Ordinance,
1and that, therefore, the burden of proving good faith of thegift to. his son lay upon the first defendant, and that, not havinggone into the witness box, he had not discharged the burden. I amnot going to discuss in detail the numerous cases cited by theappellant in which such a position was held to exist, and in whichconveyances and gifts have been set aside on the presumption orproof of undue influence. Undoubtedly, in order to create a positionof active confidence, it is not necessary for one of the usual relation-ships of solicitor and client, guardian and ward, parent and child,&e., to exist, and there is no reason why one' brother should notstand to another in such a position. Every case must, however,depend upon its particular facts, and I agree with the District
i Wo. 14 of 1895.
1919.
Shaw J.
Soyea v.8oyea
( 320 )
Judge that the evidence, worthy of credit, in the'present case doesnot establish that such a position existed between the first defendantand the plaintiff. So far as the evidence discloses, the first defendantdid no more than to exert himself to the utmost to help his brotherin difficulties and misfortune he had brought upon himself, andhe was in no way instrumental in procuring the settlement of the .plaintiff's property on the second defendant. In these circumstances,
I do not think that the law necessitates any presumption of fraudagainst him, but even if it did so, the presumption is amply negativedby the evidence in the case, showing that the deeds were preparedby the family solicitor of the De Soysa family, who Was in no wayacting for the first defendant in the matter, at the sole instance,and even insistence, of the plaintiff, and that the plaintiff, long afterthe deeds were executed, and when it is impossible to suppose thathe could still have been under any influence of the first defendant,publicly expressed his approval of what he had done.
1 agree that the appeal should be dismissed with costs.
Appeal dismissed.