017-NLR-NLR-V-43-SURIYAGODA-v.-WILLIAM-APPUHAMY.pdf
SOERTSZ J.—Suriyagoda v. William Apptihamy.
89
1941Present: Howard C.J. and Soertsz J.
SURIYAGODA v. WILLIAM APPUHAMY.
103—D. C. Kandy, 26.
Administration—Transfer of property by heirs—Seizure of property by creditorin execution—Rights of creditor—Executor a party to transfer.
A transfer of property by the heirs of an estate is subject to thepayment of the debts of the estate if, without recourse to the propertytransferred, the debts cannot be satisfied.
The mere fact that the executor is a party to the transfer doesnot affect the rights of the creditors.
^^PPEAL from a judgment of the District Judge of Kandy.
H. V. Perera, K.C. (with him C. C. Rasa-Ratnam), for the fourthdefendant, appellant.
L. A. Rajapakse, for the plaintiff, respondent.
Cur. adv. vuIt.
June 5, 1941. Soertsz J.—
This was an action to have it declared that the three allotments ’ ofland described in the plaint were liable to be seized and sold on a writwhich the plaintiff had obtained against the first defendant who was theexecutor of the estate of one Aurelis Appuhamy.
When the seizure was effected, the fourth defendant successfullypreferred a claim based on a deed 4 D 1 of June 21, 1937, given to himby the first defendant and his nieces, the second and third defendants.
The plaintiffs alleged that this deed had been executed fraudulently andcollusively by the defendants and that it was therefore liable to be setaside. Alternatively, she alleged that the lands dealt with were liableto be sold on her writ inasmuch as a transferee from heirs takes a titleliable to be defeated in the course of administration.
The learned trial Judge found that “ the plaintiff has not proved fraudand collusion on the part of the fourth defendant or any of the ingredientsnecessary to succeed in a 247 and Paulian Action ”. Perhaps, on theevidence, that is a correct conclusion, but I find it difficult to resist a verystrong impression that the fourth defendant knew all about the state ofaffairs. As for the first, second, and third defendants, there can be nodoubt that they were fraudulent. The first defendant was examinedunder section 219 of the Civil Procedure Code and filed an affidavit onAugust 24, 1936, disclosing these three lands-and some others as properties .of this estate. Thereafter, there were certain negotiations betweenthe plaintiff’s proctor and the first defendant with a view tosatisfy the plaintiff’s claim but as these seemed to linger in the stage ofnegotiation too long, the plaintiff enforced her writ on July 27, 1937,and then she was confronted with the deed of June 21, 1937. Thedefendants had used the interval of so-called negotiation with theplaintiff very effectively indeed. But the defendants have a finding intheir favour on this question and we can hardly disturb that finding of facton appeal.
The learned Judge, however, found for the plaintiff that the deedin favour of the fourrtj defendant must yield to the seizure by the
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SOERTSZ J.—Suriyagoda v. William Appuhamy.
plaintiff because that seizure was effected in order to realize a debtdue by the estate of the deceased to the plaintiff. In so finding, thelearned Judge stated the law in regard to the matter too widely when hedeclared that even when there were lands belonging to the estateundisposed of “ the entire estate is subject to the debts of a deceasedand a creditor is entitled to proceed against any of them But Counselfor the appellant attacked that finding on other grounds as well. Hecontended (a) that there is no material on which it can be asserted thatthe debt was a debt of the deceased, and riot a debt of the executor;(b) that a person taking a transfer from an executor bona fide for valuegets a title free from the debts of the estate.
Before I go on to consider these submissions, I would point out thatdeed 4 D 1 does not deal with land No. 1 in the Schedule to the plaintand that land is clearly liable to seizure and sale. .
The question that remains is in regard to the liability to sale of theother two lands. As I have already stated the first objection taken bythe appellant’s Counsel is that there is no proof in the case that the debtsought to be enforced, is a debt of the deceased testator and 'not a debtof the executor. But the documents in the case establish beyond anydoubt that the claim in reconvention made by the present plaintiffin D. C. Galle, case No. 31,956, was a claim based almost entirely on awrongful conversion of property by the testator himself (see P 2 and P 3)and the decree entered in that case created a debt against his estate.It is well settled law that transfers by the heirs of an estate are subjectto the debts of that estate, if, without recourse to the lands transferred,the debts, cannot be satisfied. See Fernando v. PereraEkanayake v.Appu – ; Silva v. Silva “ ; Gopalasmay v. Ramaswamy Pulle ‘ ; MuttiahChetty v. Ukkurale Korale
The second objection taken by the appellant’s Counsel was that thefourth defendant’s title was not liable to be defeated in this mannerbecause he was a bona fide purchaser for value from the executor of theestate of the deceased. But here again the documentary evidence isagainst that contention. 4 D 1 is a transfer by the heirs of the deceased,his two daughters; The fact that the executor joined in the transferappears to be due .to the fact that the fiscal’s transfer for one of the landsdealt with was in his name. Probably, it was a land bought by thedeceased in respect of which the transfer was not ready till after thedeath of the deceased. In P 5 the executor shows that land as a landbelonging to the heirs of the estate. It is also reasonably clear on theevidence that the proceeds of this sale did not go to pay debts to theestate, and that there are no other assets of the estate available for thepayment of the plaintiff’s debt.
For these reasons, I am of opinion that the appeal fails and must bedismissed with costs.
Howard C.J.—I agree.
1 SS S. C. e. 54.
* 3 2V L. R. 350.
Appeal dismissed.
10 N. L. R. 234.
14 N. L. R. 238.
* 27 N. L. R. 336. cT