STEWART et al. v. SENANAYAKE et al

067-NLR-NLR-V-31-STEWART-et-al.-v.-SENANAYAKE-et-al.pdf


( 241 )
Present: Fisher C.J. and Maartensz A.J.
STEWABT et al. v. SENANAYAKE et al.
198—D. C. Avissawella, 165.
Last will—Direction to executor to sell property—Devise of proceeds ofsole—Failure of executor to sell—Property dealt with hy heirs—Vesting of title—Execution sale—Subsequent acquisition of title byjudgment-debtor.'
Where a last will directed the executor to' sell property andthen devised the proceeds of sale in the manner specified, andwhere the executor foiled to carry out the directions and thedevisees dealt with the property as owners,—
Held, that the devisees must be deemed to have elected to takethe property in its original character.
The subsequent acquisition of title by a judgment-debtor doesnot ensure to the benefit of a purchaser at the execution sale.
T
HIS was an action for declaration of title to 2/5 share of anestate called Belangalla, which belonged to one John Stewart.
He died in September, 1906, leaving a last will, by which he directedhis executor to sell the estate after the death of his wife, to whom heleft the life-interest. The last will then devised the proceeds of saleamong his four children, in the proportion of a 1/5 share to each, andthe remaining 1/5 among three grandchildren. The life-renterdied in 1909. The executor died in 1920, without carrying out thedirections of the will.
The main question argued in appeal was whether any title vestedin the children and grandchildren of John Stewart, as it wascontended that the dominium vested in the executor in terms of thelast will.
H. V. Perera, for defendants, appellants.'—The entire basis ofthe plaintiffs’ claim is that the last will of John TheodoreStewart vested the title to the land in question in his childrenand grandchildren through whom the plaintiffs seek to derivetheir own title. It is clear the last will does nothing of thekind inasmuch as it creates a trust for sale, the proceeds of whichhad to be distributed among the children and the grandchildren. Theexecutor having died, without carrying out the directions containedin the will, the legal title passed to his representatives, so thatwhatever weakness there may be in .the defendants’ title the plaintiffscannot maintain this action.
Secondly, with regard to the 1/5 share of the first plaintiffclaimed by the defendants the principle of the exceptio ret venditae ettraditae applies. Assuming that at the time of the sale in execution
1*».
( 242 )
1929.
Stewart v.Stnanayake
in which the defendants bought this share the first plaintiff had notitle since he had previously, been -adjudicated an insolvent, the •subsequent acquisition of title by him after he had obtained hiscertificate enures to the benefit of the defendants.
Counsel referred to Rajapakse v. Fernando 1 * and Gunatilleke v.Fernando
C. V. Ranawake, for plaintiffs, respondents.—The will createsho trust, the property is hot vested in the executor, nor is itbequeathed to him.The defendants did not in the lower
Court raise a specific issue on this point, possibly because theythemselves at the execution sale bought the premises on theassumption that the children and the grandchildren of John Stewartwere rightly owners. Even if there was a trust, the executor havingomitted-to carry out the testator’s wishes, the heirs can be said tohave elected to take the property in its original character. Seesection 58 of the Trusts Ordinance, No. 9 of 1917. Whatever mayhave been the testator's intentions, the heirs entered into possessionon the footing they were owners, and there is nothing to show :theexecutor did not acquiesce in this. See Vansanden v. Mack*
The principle of the e&ceptio rei venditae et traditae does not applyin cases where a property is sold in execution. The estoppel raisedagainst a vendor who has no title on the date of sale but subsequentlyacquires title is based on the actual contract of sale between vendorand vendee, the vendor holding out that he has title, and the vendeebuying on that footing. But there is no such contract where apurchaser buys at an execution sale. Moreover, in the present caseit cannot be said that at the rime of the execution sales the firstplaintiff had no title to .the land ; he had title which could havebeen bought only in appropriate proceedings, viz., the sale bythe assignee in the insolvency case. The defendants bought inproceedings which were void and irregular.
Counsel referred to Suppiah Pillai v. Ramanathaiv4* andAppuhamy v. Ramanathan.5
November 15, 1929. Fisher C.J.—
Assuming that there was a trust for sale in this case, in my opinionsection 58 of the Trusts Ordinance, No. 9 of 1917, would beapplicable, but the case was argued in the District Court and thedefendants-appellants’ answer was drawn on the basis that the willgave the property to the beneficiaries. The questions therefore tobe considered are—(1) What passed under D 2 ?(2) Are defendants
entitled to the benefit of W. A. Stewart's subsequent acquisition ?and (3) Have the defendants acquired a prescriptive title to the share ?
i (1920) 21 N. L. R. 495.
* (1919) 21 N. L. R. 257.
*.(1895) 1 N. L. R. 311.* 22 N. L. R. 225.
s 25 N. L. R. 430.
( 248 )
With regard to (1),. all that passed under D 2 were the interests J?owhich C. F. Stewart, J. M. Stewart, and Alice R. Stewart were-—
entitled, that is to say, 8/5. W. A. Stewart’s interest was then ^I8HEBvested in his assignee, and the remaining 1/5 was vested in the three Stewart«.grandchildren of the testator, who were then minors, and, moreover, Senanalfak*were no parties to the action. As to (2), in the absence of anyauthority I do not think that the subsequent acquisition of propertyby a judgment-debtor enures for the benefit of the purchasers atthe sale in execution of his property. All that they acquired is thea Tinting right, title, and interest, and this cannot include propertysubsequently acquired by purchase by the judgment-debtor. As to
,' there is evidence on' behalf of the plaintiff of possession by Aliceon behalf of the persons entitled to the 2/5 share which did notpass on D 2 ; and further, there is evidence of a direct assertion of herpossession in that capacity which must have been within the know-ledge of the transferees in D 2. Only one witness is called for thedefendants. It must be taken therefore that they were, and weretreated as, co-owners and only possessed as such.
The appeal must be dismissed with costs.
Maartensz A.J.—
This was an action for declaration of .title to an undivided 2/5share of an estate called Belangalla.
Belangalla estate belonged to John Theodore Stewart. He diedon September 29, 1905, leaving a last will which was admitted toprobate in case No. 2,497 of the District Court of Colombo.
The plaint avers that John Stewart by his last will—
“ devised and bequeathed all his property to his children, AliceRebecca Stewart, William Alexander Stewart, John MarshallStewart, and Charles Francis Stewart, in the proportion of 1/5share each, and the remaining 1/5 share to his grandchildren.
John Francis Theodore Stewart, Irene St. Clare Stewart, GladysAmalia Cyril Stewart, jointly, subject, however, to a life-interestover immovable property in his wife, who died about the year1909, whereupon the said children and grandchildren of JohnTheodore Stewart became the absolute owners of the saidBelangalla estate hereinbefore described."
The three grandchildren John, Irene, and Gladys, by deed No. 135dated February 16, 1920, sold their 1/5 share to William AlexanderStewart.
In execution of a mortgage decree entered in case No. 9,989 a1/5 share was sold against William Stewart and purchased by themortgagee, Daniel Ebert, upon deed No. 213 dated November 7,
1924, executed by the Secretary of the District Court of Colombo.
Ebert by deed No. 344 dated September 18, 1926, sold this 1/5.share to William Stewart and R. A. Rabot.
31/19-19B9.
Maabtsmsz
A.J.
Stowkrt v.
Senanayake
( 244 )
William Stewart was adjudicated an insolvent in proceedingsNo. 2,682 of. the District Court of Colombo. The assignee sold theinsolvent's 1/5 share of the estate with the leave of Court by publicauction and it was purchased by A. L. Thiripadinayaker on April 12,1916, and he obtained a transfer from the1 assignee No. 114 datedApril 19, 1917. Thiripadinayaker by deed No. 152 dated June 9,1920, sold this 1/5 share back to W. A. Stewart.
The plaintiff's claim to a 2/5 share is based on these deeds.
The fourth defendant filed answer in which he averred—
that upon a writ issued in case No. 40,505 of the District Courtof Colombo against C. F. Stewart, J. M. Stewart, Alice R. Stewart,and W. A. Stewart (the first plaintiff) the entirety of the landdescribed in the plaint was sold against them on February 26,1916, and was purchased by M. Marigida Perera Hamine andM. G. Perera ; this defendant who obtained Fiscal's transferNo. 1,501 dated August 17, 1916, and the said M. Marigida Pereraentered into possession of the said premises.”
Marigida Perera is said to have gifted her interest to DonaldSenanayake, who in turn transferred the half share to the first,second, and third defendants, who are minors ; these defendants saidthey would abide by the answer filed by the fourth defendant.
The action was tried on the following issues: —
Was Wm. Alexander Stewart (first plaintiff) originally
entitled to an undivided 1/5 share of the land in question.
Were John Francis, Irene, and Gladys Amelia Stewart entitled
to an undivided 1/5 sht ve jointly.
Did the said Wm. Alexander become owner of a further .
1/5 share by purchase from the said John Francis, Irene,and Gladys Amelia.
Was a 1/5 share belonging to the said Wm. Alexander
sold on writ in case No. 9,989 of the District Court ofColombo.
If so, did the said share, devolve again on the said Wm.
Alexander and the second plaintiff as set out in paragraphs5 and 6 of the plaint.
Did the sale in case No. 40,505 of the District Court of Colombo
of & 1/5 share belonging to the said Wm. Alexanderconvey good and valid title in view of the fact thatthe said Wm. Alexander had been earlier adjudicatedinsolvent in case No. 2,632 of the District Court of Colombo".Did the assignee acquiesce in and ratify this sale to thefourth defendant and predecessors in title ?
Was a 1/5 share belonging to the 6aid Wm. Alexander
sold in proceedings in the said case No. 2,632.
( 245 )
1929.
If so, did deed No. 114 dated April 19, 1917, convey title
superior to any claimed by the defendants upon Fiscal'strasfer No. 1,501 of August 17, 1916.
Prescription.
'(10) Damages.
Is the first plaintiff estopped by his conduct in failing to
disclose the fact of insolvency and thereby inducing thepurchasers on Fiscal's transfer No. 1,501 to purchase?
Did the subsequent acquisition of title by first plaintiff upon
deeds Nos. 152 of June 9, 1920, and 185 of February 16, 1920,enure to the benefit of fourth defendant and co-vendees?
Did the executor have the right of dominium over the
property in terms of the last will? If so, have thedefendants acquired title?
The learned District Judge held that the shares of the grand-children .of John Theodore Stewart were not affected by the sale inexecution against his four children in case No. 40,505 of the District’Court of Colombo and that the defendants had not acquired aprescriptive title t.o the 1/5 share of the grandchildren of JohnStewart, as Alice Stewart continued to live on the estate on behalf ofthe grandchildren. He rejected the; evidence for the defence thatAlice Stewart was allowed to live on the estate as she had no otherplace in which to live.
As regards the shares of William Stewart (the first plaintiff), he heldthat nothing passed at the execution sale as he was an insolvent atthe date of the sale, February 26, ±916.
It was contended in appeal (1) that Belangalla estate did not vestin John Stewart's children and grandchildren under the willexecuted by him, (2) that even if the first plaintiff’s 1/5 share didnot pass on the sale of execution of the decree in case No. 40,505 ofthe District Court of Colombo, the subsequent acquisition of titleby him upon deed No. 152 of June 9, 1920, executed by the purchaserat the sale by the assignee enured to the benefit of the defendants,(3) that the learned District Judge was wrong in holding that AliceStewart continued to live on the estate on behalf of John Stewart's•grandchildren and Thiripadinayaker.
The last two contentions might conveniently be disposed, of first.
The argument that the subsequent acquisition of title by the firstplaintiff enured to the benefit of the defendants is based on theprinciple that when a person sells property to which he has no title:and acquires title subsequent, to the sale, the title by operation oflaw enures to the benefit of the vendee (RajapaUse v. Fernando *).This decision proceeds upon the ground that the vendor and hisprivies are estopped from denying the title of the vendee. Iiord
* (1920) 22 N. L. R. 495.
Maabtbhsz
A.J.
Stewart v.Senanayake
( 246 )
1929.
Maabtenbz
AJ.
Stewart«.Senanayake
Moulton at page 497 says “ their Lordships are of opinion that bythe Roman-Dutch law as existing in Ceylon the English doctrineapplies that where a grantor has purported to grant an interest inland which he did not at the time possess, but subsequentlyacquires, the benefit of his subsequent acquisition goes automaticallyto the benefit of .the earlier grantee, or, as it is usually expressed,
‘ feeds the estoppel. ’ ”
Bertram C.J., in the case of Gunatilleke v. Fernando,* held that theRoman-Dutch law is in accord with the English law on the subjectthat a person who sells property is estopped from disputing thetitle of his vendee.
We were not referred to, nor have I been able to find, any case iuwhich the principle was applied to the case where property was soldin execution against a judgment-debtor who had no title, but whoacquired title subsequent to the sale. I am of opinion that noauthorities can be found because the theory of estoppel isinapplicable in the case of a sale in execution.
Another objection to the argument is that the sale against theplaintiff was null and void as at the time the property was seized hehad been adjudicated an insolvent.
By section 71 of the Insolvency Ordinance, No. 7 of 1853, when anyperson shall have been adjudicated insolvent all his real estate vestsabsolutely in the assignee. An exception is made by section 56 infavour of executions and attachments against the lands of theinsolvent bona fide executed by seizure and sale before the date ofthe filing of the petition for sequestration.
The exception does not apply in this case as the petition forsequestration was filed on February 15, 1915, and writ did not issuein case No. 40,505 till October 1, 1915.
The plaintiff should have moved under section 404 of the CivilProcedure Code to substitute the assignee as defendant in place ofWilliam Stewart or add him as a party defendant to the action torender the seizure effective.
As regards the issue of prescription, I see no reason to disagreewith the finding of the trial Judge that Alice Stewart remained inpossession on behalf of John Stewart’s grandchildren and Thiripadi-nayaker. His finding is strongly supported by the letter P 14 datedNovember 24, 1916, addressed to the Deputy Fiscal, Avissawella.by Messrs. T. D. & E. L. Mack, Proctors, in which they assertedwith reference to the order for possession issued in favour of theexecution purchasers in the District Court of Colombo, caseNo. 40,505, that the purchasers were only entitled to 3/5 of theestate and that Mrs. Stewart, who, I take it, is Alice Stewart, isin possession on behalf of the minors, and Thiripadinayaker, noneof whom are bound by the decree.
' (1919) 21 N. L. B. 257.
( 247 )
In any event- the plea of prescription must fail as 'against John 1929.Stewards grandchildren as the eldest attained the age of 21 * oil MaartjenszNovember 3, 1917, less than ten years before the action was A.J.died.Stewart v.-
The main question for decision, however, is whether any titlevested in John Stewart’s children or grandchildren under the willexecuted by him.
The’ testator appointed the late Mr. Bichard de Saram executorof hie will, and as regards Belangalla estate he. directed asfollows: —
“ I further direct that my said executor shall as soon after thedeath of the said Patiridumalge Nona Hami, as he shallthink fit, sell either by public auction or private contract forsuch price or prices as he shall, in his absolute discretion,think proper my said Belangalla estate and the furniture inthe house thereon. ”
TT'e devised .the proceeds of sale of Belangalla estate and his otherproperties as follows : —
“ I give, devise, and bequeath the nett proceeds of all and everysuch sale and sales, calling in and conversion and of theinvestments to my children Alice, William, Alexander,
John, and Charles, and to John Francis Theodore,
Irene St, Clare, and Gladys Amelia Sybil, my grand-children, the children of my late daughter Mary,,, in theproportions following, that is to say, an equal 5th shareto my daughter Alice, an equal 5th share to my sonWilliam Alexander, an equal 5th share to my son John, oneequal 5th share to. my son Charles, an equal 5th share to mygrandchildren, the said John Francis Theodore. Irene St.
Clare, and Gladys Amelia Sybil, or the survivor or survivorsof them, my said grandchildren, share and shares alike, andI direct tha* the share or shares to which any of my childor children or grandchild or grandchildren, who shall beminors or a minor shall be paid by my said executor to anddeposited in bank for the use and benefit of such minors or. minor, respectively, to be paid to him or his or her, respec-tively, attaining the age of 21 years. ”
The life-renter died in 1909. The executor died in or about theyear 1920 .without carrying out the directions in the will.
• The question whether the title vested in John Stewart’s childrenand; grandchildren was not raised in the issue or in the. petition ofappeal in the form in which it was presented to us at the argumentin appeal.
( 248 )
1928.
Maabtbnsz
A.J.
Stewart v.Senanayakt
The issue in the District Court at all relevant to this question is. the13th issue, which runs as follows: —
" Did the executor have the right of dominium over the propertyin terms of the last will? If so, have the defendantsacquired title? M
In the petition of appeal it was urged that—
■' They (the appellants) are entitled to succeed in law on issue13 inasmuch as the last will referred to in the proceedings,conferred ‘ the dominium * over the property in disputeto the executor and that therefore the possession by thedefendants after their purchase at the Fiscal's sale becameadverse to the rights of the rightful owner, namely, theexecutor, as from the date of such purchase. ”
I think it necessary to refer to the issue and the statement in thepetition of appeal, because the District Judge in his judgment afterstating shortly the terms of the will observed that the executor doesnot appear to have carried out the direction in the will that heshould sell the property, and that “ it is not questioned that the fourchildren of J. T. Stewart severally and hie grandchildren jointlyshared a 5th of the property.
The argument in appeal was that the children and grandchildrenof J. T. Stewart had acquired no title under the will, and that theaction must fail whether the defendants had title or not.
On the other hand it was argued that the will did not create a trustand that the property was vested in the heirs as the executor hadnot carried out the testator’s directijns by selling the estate.
The will, in my opinion, does not create an express trust. Theproperty is neither bequeathed to the executor nor vested in him intrust for sale. If there is a trust, it is an implied trust arising fromthe direction to the executor to sell the estate and distribute theproceeds of sale in the manner specified in the will.
The will is a very unsatisfactory document. No provision ismade in it for the appointment of another executor to carry out thedirections in the will in the case the executor named predeceasedthe life-renter. In the absence of any words vesting the title in theexecutor, I doubt very much whether it could be said that on hisdeath .the legal title passed to his legal .representatives.
The title is left in a state of suspense which is intolerable.
The children and grandchildren have been looked upon as theowners of Belangalla estate from the time of the death of the testator.
They have dealt with it as owners and the defendants havepurchased the shares of three of the children on the footing that theyare the owners of the property.
( 249 )
It appears to me that if there was a trust for sale this is a case inwhich the heirs of John Theodore Stewart have elected to take theproperty in its original character.
The Trusts Ordinance, No. 9 of 1917, provides for such election.Section 53 enacts that—
“ The beneficiary is entitled to have the intention of the authorof the trust specifically executed to the extent of thebeneficiary's interest.' ’
" And where there is only one beneficiary and he is competent tocontract, or where there are several beneficiaries and theyare competent to contract, and all of one mind, he or theymay require the trustee to transfer the trust property tohim or them, or to such person as he or they may direct.*’
Illustration C to that section appears to me to be exactly in point.It runs as follows: —
“ A transfers certain property to B and directs him to sell orinvest it for the benefit of C, who is competent to contract.C may elect to take the property in its original character.”
The only difficulty in the way of the plaintiffs is the absence of adeed from the executor to the heirs.
But where, as in this case, these heirs, first defendant, and MarigidaPerera, from whom the second, third, and fourth defendants derivetitle, have for many years treated the property as vested in JohnTheodore Stewart’s children and grandchildren, we ought notI think to disturb the construction they have placed on JohnStewart’s title. (Vansanden et al v.. Mack et a?.1)
I would dismiss the appeal with costs.
Appeal dismissed.
♦
1989.
Maaszbnsk
AX
Stewart v.Stnanayakt
> (1896) 1 A7. L. /. 811.