078-NLR-NLR-V-20-THE-BAPTIST-MISSONARY-SOCIETY-CORPORATION–v.-JAYAWARDENE-et-al.pdf
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Present: Bertram C.J. and Ennis J.
THE BAPTIST MISSIONARY SOCIETY CORPORATIONv. JAYAWARDENE et al.90—D. C. Chilaw, 5,502.
English Companies' Act,1862, s. 21 — Prohibition against religious
corporation holding more than 2 acres — Trust — Interpretation of
deed — Prescription.
Section 21 of the English Companies' Act, 1862, which prohibitsa religious corporation from holding more than 2 acres of landwithout the sanctionof the Board of Trade, does not prevent
a corporation registered under the Act from holding more than2 acres in Ceylon.
Gunasekera “ assigned or set over ”unto theEev. Pigott,of the
Baptist Society,“ or ins successor orsuccessorsin office,"acertain
lot of land, “ so that they may possess the same and deal with it asthey may desire.”
In the deed it was stated that the donor had assigned the land"unto Bev. Pigott, of the Baptist Society of Colombo, to build achapel for the purpose of preaching . the gospel to the inhabitantsof the place.”
Held, that thedeed did net create atrust infavour ofthe local
congregation. Ifthere was a trust atall, there was a trustinfavour
of the society.
HE plaintiff corporation brought this action against the
members of the Baptist church congregation at Madampefor a declaration that the plaintiff corporation was entitled to theBaptist church, manse, school buildings, and premises at Madampe,and for the ejectment of the defendants.
1 (1878) 39 L. T. (N. S.) 253.* (1831) 7 Bing. 237.
1018.
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1918.
The BaptistMissionarySociety Cor-porattonv.Jayawardene
The defendants hied answer denying that the plaintiff corporationwas entitled to the said buildings and premises, or that the plaintiffcorporation was entitled to eject the defendants from the saidpremises and buildings.
The case went to trial on the following issues:—*
Have plaintiffs a cause of action against the defendants/
Who were the previous holders of the premises in dispute?
(8) Did the congregation of the Baptist church at Madampe
occupy the premises as tenants under such previous holders?
Did the said congregation pay the annual rent of Be. I toplaintiffs for the said premises?
Are the plaintiffs entitled to give notice to the said congre-gation to quit and restore possession of the said premises?
If so, did plaintiffs give notice on February 27, 1916, to thesaid congregation to quit the said premises on April 1, J916?
Did the said plaintiffs become entitled to the said premises asdetailed in paragraphs 6 and 7 of the plaint?
Does the deed No. 78 of September 20, 19Q3, and deed No. 186of November 5, 1903, convey the said premises to the plaintiffs?
What is the real value of th said premises?
Can the document dated September 20, 1871, referred to inthe abstract of title attached to the plaint, be admitted in evidenceto prove plaintiffs’ title?
If so, does it convey title to the plaintiffs to the saidpremises?
Have the said congregation been in wrongful' possession ofthe said premises since April 1, 1916?
Prescription on either side.
Damages.
The learned District Judge gave judgment for the plaintiffcorporation as prayed for. The defendants appealed.
Bawa, K. C. (with him A. St. V. Jayawardene fand Canakaratne),for the appellants.—The plaintiff corporation cannot maintain thisaction, as they do not have the capacity to hold more than 2 acresof land without the permission of the Board of Trade. See section21 of Companies’ Act, 1862 (English). This section is applicablenot only to lands held in England, but to all lands which the cor-poration may wish to acquire in any part of the, Empire. Thesections 18 and 21 must be read together. The incorporation of acompany does not give it all the rights of a private individual.The rights of a corporation are those which are defined in the Actand in the memorandum of incorporation.
■ Counsel cited Halsbury, ’vol. 5, pp. 285, 725; Ashbury RailwayCarriage and Iron Go. v. Riche;1 Wenlock v. River Dee Co.; 2 Hals-
bury, vol. 27, p. 162.
1 {1875) L. B. 7 House of Lords 653.
* (1883) 36 Ch: D. 685.
( 8«1 )Pigott was a trustee for the congregation. He had no right toalienate the land to the plaintiff corporation. A bequest to thepoor of the Burgher community was held to have created a trust infavour of the poor of that community.
In 1899 the plaintiff society gave autonomy to the congregation,and the management of the church was handed over to the congre-gation, and the trust was at an end. The defendants did not payany rent. The rent paid by the pastor out of his money does notbind the defendants. The defendants did not acknowledge the titleof the society after they began to manage their affairs.1
The plaintiff corporation may, perhaps, ask the Gourt that propertrustees be appointed, but they cannot bring an action for declara-tion of title against the congregation.
The trustee cannot set up a claim adverse to the beneficiaries.
The absence of formal and specific words constituting a trust doesnot preclude the Gourt from giving effect to a charitable trust if itcan be gathered from the deed.
Counsel referred to Ordinance No. 9 of 1917, section 107; Lewinon Trust 618; 85 Law Journal 114 (1916) A. C. 566.
W. Jayawardene (with him SamarawicTcreme and Gooray), forthe respondents (not called upon).
1918.
The BaptistMissionarySociety Cor-poration «.Jayawardene
September 4, 1918. Bertram C.J.—
This is a very exceptional and deplorable case, and I presume Womay take it that the extreme action which has been taken in thiscase would not have been taken unless it was thought that thingshad come to a pass where no friendly settlement was possible. Itis not for us to express any opinion on the rights or wrongs of acontroversy of which we know nothing, and the only thing we cando is to decide the points of law brought before us. The pointsreduce themselves in effect to two. The first is a question of thecapacity of the plaintiff corporation, and the second is a questionof title to the property which is the subject of the dispute.
The plaintiff corporation is a British religious corporation con-stituted for the purpose of taking over throughout the world thevarious properties which were held in trust for the Baptist MissionarySociety by its local agents. It is expressly provided in the memo-randum of association of this corporation that one of its objects is■ to hold lands, not only in the United Kingdom, but also in theColonies. The corporation is created in pursuance of the companylegislation in force in the United Kingdom. It is not a companyformed for the purpose of gain, and the various special provisionsof the Companies’ Acts which apply to corporations of that descrip-tion, of course, apply to it.
It is contended by the appellants that the provisions of theCompanies’ Acts are such that they impose upon this corporationa certain fundamental limitation of its capacity essential to its
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1918.
Be&t&au
C.J.
This BaptistMissionarySociety Cor-poration v.Jayawardene
constitution, and that by virtue of that limitation this corporationis precluded from holding land in any part of the world more than2 acres in extent without the license of the Board of Trade. Twoacres in extent there referred to does not mean the extent of anyparticular holding, but the total holding of the corporation.
The position of this corporation in this Colony is the same as thatof a foreign corporation. It originates in a system of law not ourown. The position of foreign companies in English law is that theirexistence is recognized by international comity. Similarly, theposition of English companies in this Colony would appear to bethat they are recognized by Imperial comity.
Now, it is argued by Mr. Bawa that, whatever limitations areimposed upon the corporation by the English law, in so far as theyare part of its constitution, must apply here, and he urges that thelimitation to which I have referred is part of the essential consti-tution of the company. The principles applying to the matterappear to be quite plain, and I will refer to two statements of them:one in Dicey’s Conflict of Laws, and the other in Lindley onCompanies. The statement of the law given in Dicey is in rule 129:“ The capacity of a corporation to enter into any legal transactionis governed both by its constitution and by the la# of the countrywhere the transaction occurs. ” In illustrating that principle.Dicey says: “ A corporation, for example, which is. prohibited byits constitution from the purchase of land, has no power to effect avalid purchase of land in any country; for the corporation existsas such only by virtue of its constitution, and any acts done incontravention of its constitution by its directors or others are ultravires, and in strictness not the acts of the corporation. Secondly,its capacity is limited by the law of the country where a giventransaction takes place. It cannot do any apt forbidden by the lawof such country. Thus, a foreign corporation authorized by itsconstitution to acquire and hold land cannot hold land in Englandin contravention of the Mortmain Acts. ”
A similar statement of the law is. given by Lord Lindley in hi?,work, volume 2, page 1226, where he says: ‘‘Again,, although.acorporation duly created in one State is recognized as a corporationby other States, the transactions of that corporation are governed,not by the law of the State creating it, but by the law of the placewhere those transactions occur, and by the constitution of thecorporation. This last is important; for the capacity of thecorporation to acquire rights and incur obligations is limited by theobjects to attain which it is created, and these limits must beregarded whenever and wherever the extent of the corporate powershas to be judicially decided. ”
Now, these being the legal principles,, what are the enactments towhich they are to be applied? The first is section 18 of the Companies’Act, 1862. It is there declared that “ upon the registration of the
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memorandum of association, and of the articles of association incases where articles of association are required by this Act, thesubscribers of the memorandum of association, together with suchother persons as may from time to time become members of thecompany, shall thereupon be a body corporate by the name con-tained in the memorandum of association, capable of exercising allthe functions of an incorporated company, and having perpetualsuccession and a common seal with power to hold lands. ”
Now, observe, this is, what I may call, the incorporating clause,that is to say, the clause which determines the fundamental natureof the bodies created by the statute, and, observe, there is noreference in those words to any other special provision of the Act.It does not say “ subject to the special provisions of this Act, ” or“ subject to the provisions hereinafter contained. ” The words areobviously intended to be words of the most general character. Thisis all the more noteworthy, because there is one point in which thereis a reference to the terms of the Act. The section goes on “ butwith such liability on the part of the members to contribute to theassets of the company in the event of the same being wound up as ishereinafter mentioned. ” That is the only point on which the termsof the section are qualified by a reference to the other provisions ofthe Act.
The second enactment is section 21, which says “ no companvformed for the puiyose of promoting art, science, religion, charitor any other like object, not involving the acquisition of gain by thecompany or by the individual members thereof, shall, without the. sanction of the Board of Trade, hold more than 2 acres of land.
Now, the question for us to determine is this: Is section 21 to beread as a qualification to section 18, and as indicating a limitationessential to the nature of the company, or is it a special enactmentof the English law intended to impose a special and subsidiarylimitation upon certain classes of companies with a view to legalprinciples in force in England?
Mr. Bawa maintains very strenuously that the two enactmentsmust be construed as one, and that we must regard it as the intentionof the Legislature that religious corporations coming into existenceunder the Act should come into existence with a limitation of theirpowers of holding land all over the world, and that the intention ofthe Legislature was that the supervision of the holding of land bysuch religious corporations all over the world should be committedto the Board of Trade.
The alternative explanation is that section 21 is enacted with aview to-giving effect in Great Britain to the principles of the Mort-main Act. It has always been the policy of the English law formany centuries past to restrain the tying up of land in the possessionof religious corporations. By the latest Mortmain Act no land canbe conveyed to a corporation in mortmain without the royal license.
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Bebtsam
cjr.
The BaptistMissionarySociety Cor-poration *>.Jayawardene
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1918.
Bertram
G.J.
The BaptistMissionarySociety Cor-poration v.Jayawardene
x It seems to me perfectly plain that this special enactment in theCompanies’ Act Was intended to give effect to the principles of theMortmain Act. In my view the Imperial Legislature enacted thissection for the protection of lands in Great Britain, but intended toleave to other countries and to other parts of the British Empirethe power of protecting their lands.from the dangers, against whichthe statutes of mortmain were framed, to such extent as theythought proper.
We know perfectly well that it has never been thought necessaryto introduce these principles of the English law into this Colony.This Colony having taken no steps in that direction, in my opinion,the capacity to hold land, which is vested in this corporation bysection 18, is in this Colony entirely unfettered. Section 21 I taketo be a municipal enactment. If this is the case, there is no necessityto inquire as to the extent of the holdings of the Baptist MissionarySociety either in this Colony or in the world at large, and the appeal,in so far as it rests upon the contention I have explained, must fail.
The second question is a question of title. The question is, Hasthe Baptist Missionary Corporation title to the land of which it nowseeks to recover possession? There is no question as to the generalpolicy of this corporation. Rightly or wrongly it thinks it necessary,for theN purpose of its work in the world, to hold a legal title to allthe religious places in which services in which it is interested arecarried out, and in their appurtenant buildings, in the nature ofmanses, schools, or otherwise. Its policy is to have an absolutetitle unfettered by a trust. Whether or .not there is any particulartrust in any particular case must be a question of fact in regard tothat case.^
Now, its title to the property now in dispute rests mainly upon adeed in the year. 1872. By, that deed Don Davith Dabera Wije-sundera Gunasekera assigned and set over unto Rev. Henry RobertPigott, of the Baptist Society, or his successor or successors in office,a certain lot of land known as Bilingahawatta, “ so that they maypossess the same and deal with it as they may desire. " That deedcontains two references to the circumstances out of which it origi-nated. The first says that the donor has <f hereby assigned andset over ” the said land “ unto the said Rev, Henry Robert Pigott,of the Baptist Society of Colombo, to built a chapel for the purposeof preaching the Christian gospel to the inhabitants of the place.The. second states that “ a place of worship is being constructed onthe aforesaid land at the expense of the public. M
The first question is, What is the nature of these two historicalreferences? 16 either of them an ..operative clause, . or are theymerely recitals? In my opinion, formed after a careful perusal ofthe deed, these are both recitals. They merely explain how DonDavith Wijesundera Gunasekera came to make the grant. Thegrant is a grant of the most unfettered possible description. Apart
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from certain words, to which I will call attention in a moment,it does not purport to create any trust. By a trust, I mean a trustrelating to the occupation and control of the premises. There is, nodoubt, an implied trust that the premises should be used “ for thepurpose of preaching the Christian Gospel to the inhabitants of theplace, ” but that is another matter. The deed gives the land to theRev. Henry Robert Pigott and his successors, “ so that they maypossess the same and deal with it as they desire. ” If this piousdonor had intended to convey this land so that it might be heldby the Rev. Henry Robert Pigott, in accordance with the generalpolicy of the Baptist Missionary Society, he could hardly have usedmore appropriate words for the purpose. The only words whichraise a question as to whether or not a trust may be intended are thewords "or his successor or successors in office. ” These words arenot words ordinarily used in conveyancing. A man cannot vestlands on a series of persons, except in accordance with the lawrelating to fidei commissa. Apart, therefore, from any questionof trust, and apart from special legislation, the words would beinoperative, and the grant would vest an absolute title in Rev.Henry Robert Pigott. But it is provided by a recent Ordinance, theTrusts Ordinance, No. 9 of 1917, section 113: ‘‘ That where, beforeor after the commencement of this Ordinance, it is declared orintended in any instrument of trust that the trustee of the trustshall be a person for the time being holding or acting in any publicoffice, or holding or acting in any office or discharging any duty inany public or private institution, body, corporation, association, orcommunity, the title to the trust property shall devolve from timeto time upon the person for the time being holding or acting in anysuch office, ” &c.
1918.
Bebtkam
C.J.
The BaptistMissionary;Society Cor*poration v.Jay award tne ■
If, therefore, this was a trust, the title to this property so devolvedon the person for the time being holding the same office in theBaptist Missionary Society as the Rev. Henry Robert Pigott. Butthe question is, Is there a trust at all? I can see no indication of anytrust committing the occupation and control of the premises to thelocal congregation. If there was such a trust, this Court wouldcertainly give effect to it. But the absolute words at the conclusionof the document prevent such an inference being drawn from thereferences to the history of the matter in the early part of the deed.Even if there is such a trust, therefore, there is certainly no trust infavour of the congregation.
The next question is, Is there a trust in favour of the BaptistMissionary Society, of which Mr. Pigott appears to have been thelocal officer? The law in regard to the creation of a trust is nowdeclared in section 6 of the Trusts Ordinance, and it is theredeclared that a trust is created, when the author of the trust indicateswith reasonable certainty, amongst other things, the beneficiary.The question -is, Is the beneficiary indicated with reasonable certainty
28
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1918.
Bhbtbam
CJ.
The BaptistMissionarySociety Oor•poraHonv.Jayawardene
in this deed? I have very grave doubt as to whether there is anysuch reasonably certain indication. One might conclude that theintention of the deed was to vest the property in the Rev. HenryRobert Pigott in trust for the society of which he is an officer. Butthe words are somewhat slender for that purpose. Certainly, thatis the only trust that can be gathered from the document, if thereis a trust at all. But it is not really necessary to decide that point,because, if there was a trust in favour of the society, then Mr. Pigott,in the year 1902, joined in a deed conveying his title to the BaptistMissionary Corporation, who are the successors of the BaptistMissionary Society, and by that conveyance—being a conveyancefrom a trustee to the beneficiary—he put an end to the trust andvested an absolute title in the beneficiary. On the other hand, ifit is considered that the words are so uncertain that no trust can bedeemed to be constituted, then the title which passed to Mr. Pigottwas an absolute title, and by that same deed he has conveyed thatabsolute title to the Baptist Missionary Society. In one way or theother, therefore, the Baptist Missionary Corporation is vested withabsolute legal title to Bilingahawatta, subject, no doubt, to anobligation to use the premises “ for the purpose of preaching theChristian Gospel to the inhabitants of the place. "
l^ow comes the question of the effect of that upon the generalpremises on which these buildings in dispute are situated, and theirappurtenant lands. There are in evidence three documents in thenature of surveys. The first is a survey dated July, 1870, whichrelates to Coangahawatta, and the area of Coangahawatta is thereindescribed as 16 65/100 square perches. The second is is surveydated February, 1872, which relates to Bilingahawatta, the areaof which is described as 2 roods 4 square perches. It appearsfrom these two surveys that these two lands are contiguous. Thethird document is a survey of what is obviously the whole property.It is dated August 9, 1877, and it purports to refer to certain landsbelonging to the Baptist Missionary Society, and if the plaint isexamined, it will be found that it comprises the property mentionedin the two earlier surveys, together with a certain additional strip,and the buildings appear to be on the land known as Bilingahawatta.
Now, it is plain that, in the year 1877, the Baptist MissionarySociety was in possession of the whole of that property. They heldthe property through Mr. Pigott as regards Bilingahawatta. Butwith regard to the remaining portion, it appears that no conveyancewas ever executed either in favour of Mr. Pigott or in favour of anyother officer nominated by the society. The title to these portionsremained in the name of a Mr. C. E. Corea. But it is plain thatas early as 1871 the Baptist Missionary Society was possessing thewhole land, and that these three portions of land were then treated,as one. It appears that they have also been treated as a singleproperty ever since; and in the absence of any evidence to the
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contrary, it should be taken that the Baptist Missionary Society,through their agents, continued in possession of the property. Now,.at a certain point in the history of the society, it appears that theydecided to confer local autonomy upon their various congregations.One of the privileges of this local autonomy was that the congre-gations should support their own minister; another was that theyshould have certain powers of church government. But it appearsto have been the intention of the Central Society to maintain acertain measure of control over the local congregation by means ofits title to the properties on which they worshipped, and, therefore,they did not vest the properties in the congregations, but wentthrough the form of leasing them to the congregations for anannual sum. The whole of this property, comprising thesethree lands, was so put in possession of the local congregation bythe local officer of the Baptist Missionary Society, subject to thisannual rent. The congregation, therefore, entered into possessionof this whole property, both Bilingahawatta and the two adjoininglots, as lessees or licensees of the society. As a matter of fact, inone way or the other, as it fell due, this annual rent was collected upto the year 1915. But these defendants are not a corporation, andthe payment of the rent would only be binding upon those whomade the payment, or who acquiesced in it. But the significanceof the payment of the rent is not that it is binding upon the defend-ants. Its significance is that the Baptist Missionary Society, fromthe time of the inception of this arrangement, continued to assert •title and to exercise acts of ownership over the property which wascommitted to the local congregation. They have never abandonedit, and, inasmuch as the local congregation entered into the occupa-'tion of the property as licensees, they must be held to have continuedto possess it in that capacity. There was, therefore, no abandonmentof the property of the society, and there could, in the nature of thecase, be no prescription against the society by the floating membersof a congregation which had come into possession as licensees.That being so, the title of the persons who were in possession of thewhole of Bilingahawatta having been vested in the corporation, thecorporation can sue for the recovery of this property by virtue of itstitle. With regard to the adjoining lands, which were also put intopossession of the congregation as licensees at the same time bythe corporation, it must be taken that the Baptist MissionaryCorporation was put in possession of those lots by the person whoconveyed to them the property of Bilingahawatta, which he washolding in connection with it. On these grounds, therefore, I thinkthat the Baptist Missionary Corporation are entitled to the recoveryof the whole premises.
The order of the District Court gives the plaintiffs a remedywhich it was not asked for in the plaint, mid which appears to beunnecessary. The learned District Judge orders the ejection of
1918.
Bertram
C.J.
The BaptistMissionarySociety Cor-poration o.Jayawardene
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Bertram
C.J.
The BaptistMissionarySociety Cor-poration v.Jayawardene
the defendants. It does not appear to me that those words shouldremain in the order. All that is necessary is a declaration of titlein favour of the plaintiffs, and an order that they recover possession.As I understand, at present the property is held by the publicauthorities for those who may ultimately appear entitled thereto,and no doubt possession will be given to the plaintiffs. We neednot, therefore, consider any question of ejectment.
For the reasons I have explained, I am of opinion that thisappeal must be dismissed, with costs.
Ennis J.—
I am also of opinion that section 21 of the Companies’ Act ismunicipal in its effect, and there is nothing to prevent the plaintiffcorporation from holding more than 2 acres of land in Ceylon.Ordinance No. 22 of 1866, after saying that questions relating tocorporations are to be decided by the law in England, contains theexpress proviso that this enactment shall not be taken to introduceinto the Colony any part of the English law relating to the tenure,or conveyance, or assurance of, or succession to, any land, or anyestate, right, or interest therein.
I also agree that P 29 conveys an absolute title to the Rev. HenryRobert Pigott, and that the operative clause, in that document isthe last one. The title so conveyed has been passed by Pigott tothe plaintiff corporation.
I am also of opinion on the evidence that the possession of thisland was given to the plaintiff corporation, together with the twoadjoining lands, Ambagahawatta and Coangahawatta, at the sametime. All three lands appear in one survey, P 30, dated August 9,1877, as being the property of the Baptist Missionary Society, thepredecessor in title of the plaintiff corporation. The two lands•not covered by the document P 29 have been acquired by prescrip-tion. I am unable to see how the defendants have shown that theyhave acquired any rights in the land independently of the plaintiffcorporation and its predecessor, the Baptist Missionary Society.
For these reasons I agree with the order proposed by my Lordthe Chief Justice.
Appeal dismissed.