THEODORIS FRENANDO v. ROSALIN FERNANDO

065-NLR-NLR-V-05-THEODORIS-FRENANDO-v.-ROSALIN-FERNANDO.pdf


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1901.July 10,
16, qnd 26
THEODORIS FERNANDO v. ROSALIN FERNANDO.
D. G'., Kandy, 12,9-59.
Action by creditor of deceased testator—Liability of heir or devisee of testatorfor his debt—Conveyance of land by his executrix to daughter in considera-tion of marriage—Right of creditor to follow such property.
As a general- rule an heir or devisee under a will is liable for thetestator's debts to. the extent of the share of the inheritance or estate -which has come into his hands, whether by operation of law or by con-veyance from the executor, and a creditor of the deceased testator isentitled to follow the property in the hands of the heir.
But where the property sought to be followed was settled bond fideon the heir or devisee in consideration of marriage, it is not liable to the.claims of the deceased’s creditors.
I
-N this case the plaintiff prayed for a declaration that a deed! ofconveyance made by Carolina Fernando, as executrix of her
deceased husband Juwanis Fernando, may be declared to havebeen made in fraud of the creditors of the said Juwanis Fer-nando, and that the estate called Spring Mount, sought to beconveyed, thereby, may be made liable to be seized and sold inexecution' of a decree in favour of the plaintiff, pronounced insuit No. 11,034 in the District Court of Colombo against the saidexecutrix.
It appeared that Juwanis Fernando had agreed with thesecond defendant (his intended son-in-law) that, in consideration ofhis marriage with the first defendant, he would at such marriagemake over and convey to his daughter, the first defendant, lands ofthe value of Rs. 30,000; that in terms of the said agreement thesecond defendant married the first defendant; that as JuwanisFernando had died prior to^ such marriage, Carolina, his widowand executrix, conveyed to the first defendant Spring Mount withother immovable property of the aggregate value, of Rs. 30;000 in.
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fulfilment of the agreement; that Juwanis Fernando died on21st June, 1897; that the first defendant married the second defen-dant on the 14th August, 1897; that plaintiff obtained a judgmentagainst his executrix Carolina on 10th May, 1898, upon twopromissory notes granted him by deceased on 11th December, 1896.for Rs. 2,400; that plaintiff sued out writs of execution and causedSpring Mount to be seized, whereupon the first defendant pre-ferred a claim to it; that the District Court of Kandy investigatedthe .claim and ordered the release of the seizure, and that thereafterthe present action was instituted under section 247 of the CivilProcedure Code.
The Distinct Judge dismissed plaintiff’s action by the followingjudgment:—
“ The issues are. (1) whether the transfer by Carolina Fernandoto the first defendant is bad in law for any of the reasons statedin paragraph 4 of the plaint; and (2) whether the land inquestion is liable to be sold in execution of the decree in D. C..Colombo, No. 11,034.
“ The law as to alienations in fraud of creditors is stated in thejudgment of Berwick, D.J., in Brodie’s case (Rdmandtkan, 1877,p. 89). He there quotes a passage from Voet (42, 8, 14) where twoconditions are laid down as necessary to make a conveyancefraudulent, namely, a fraudulent intent on the part of the debtorto defraud his creditors, not necessarily any particular creditor,and creditors having been prevented from recovering their debts.
“ In the present case the plaintiff failed to make out either ofthese conditions. It has not been proved that Juwanis Fei'-uando’s estate was in fact insolvent, or that the transfer so dimi-nished the assets as to render the estate insolvent. It has also notbeen shown that the executrix had notice of the debt to the plaintiffwhen she executed the transfer. I understand that the plaintiff'sdebt, which at the date of action was something over Rs. 2,400, has,by the sale of property belonging to the estate of JuwanisFernando, been reduced to Rs. 867. There is no evidence to showthat the conveyance was a fraud on creditors according toRoman-Dutch Law. (D. C., Matara, 427, Civil Minutes, 19thJuly, 1895.)
“The transfer to the first defendant was real. It was for valu-able consideration, namely, -the marriage of the testator’s daughter,the first defendant, with the second defendant- The transfer issilent as to this, but the evidence is explicit, that the transfer was<executed on the day of the marriage. I hold, that the conveyanceof the executrix vested a good title in the first defendant. ’ ’
1901.
July 10,IS, and 23.
Plaintiff appealed.19-
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1801. Seneviratne (with him Walter Pereira), for appellant.—TheIS^and^S impeached deed of conveyance does not set out the consideration
’ ' of the deed to be an agreement to marry, or the marriage itself.
It declares that certain properties were vested in the grantor ontrust to divide and convey the same to the children of Juwarifsand Carolina, and that Carolina grants to Eoslin certain propertj.es.Such being the facts, the oral evidence let into the case as tothe marriage agreement was inadmissible. The deed must belooked upon as a voluntary conveyance void as against creditors.1 C. L. R. 101; 2 C. L. R. 72. The executrix herself pointed outthis property for seizure, which shows that there was no otherproperty available to satisfy the decree in the plaintiff's favour.
E. Jayawardene, for respondent.—It has been proved that theconveyance was in consideration of marriage' The deed was grantedon the very day of marriage. The settlement of the property onthe bride need not have been made on the day of marriage exceptfor the agreement pleaded by the defendants. Marriage is avaluable consideration, and a conveyance made for such a con-sideration has the same effect as a bond fide sale, and cannot beimpeached. Story on Equity, §354; 1 Stephen’s Commentaries, 514.The assets of a testator granted to a legatee or heir on marriagecannot be reached by the creditors of the testator. Dilkes v.Broadmead, 2 D. F. and J. 566; Spackman v. Timbrell, 8 Sim.253. A donation or sale cannot be set aside if the donor weresolvent at the time he made it, and the donation' did not causehim to become insolvent. 3 Burge, 607; 3 N. L. R. 274 and 278;Bvodie'8 Case, Ram., 1877, p. 90. None of these circumstancesis here present. The judgment of the Court below is wellfounded.
Cur. adv. vult.
28rd July, 1901. Monceeiff, J.—
The plaintiff obtained judgment for Es. 2,397.82 in an actionagainst W. Carlina Fernando as executrix of the estate of herhusband W. Juwanis Fernando, who died on the 21st June, 1897.Judgment was signed on the 10th May, 1898, and the defendant-executrix pointed out for seizure a property named “ SpringMount ” alias Seranigahawatta.
The property was seized in execution. The first defendant inthis action claimed it; her claim was allowed, and the plaintiffproceeded under section 247 of the Code to have the right, whichhe claimed to the property established.
The District Judge, however, again decided in favour of theclaimants, and the plaintiff appealed to this Court.
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The property in dispute had been part ol the estate of JuwanisFernando. His executrix included it in the inventory of hisestate, but on the 14th August, 1897,—a few weeks after hisdeath,—she transferred it by deed to her daughter, the firstdefendant. On that same day (the 14th August, 1897) the daughterwas married to Harry de Mel, the second defendant. No con-sideration for the- transfer is stated in the deed, but the purportof tjhe joint will of W. Juwanis Fernando and his wife is expressed,showing that the survivor was to hold the property on trustfor division or conveyance (at his or her discretion) to thechildren of the marriage. And the transfer is made “ in pursuanceof the said trust.” Although feeling the force of the scruples ofthe Chief Justice,, in view of the second defendant’s evidence, andthe fact that the transfer was executed on the day of the marriage,I think that it was made in respect of the marriage, being promptedby natural love and affection and regard for the joint will of theexecutrix and her husband. There was therefore valuable con-sideration for it.
The second issue (the only issue we need notice) was whetherthe land in question is liable to be sold in execution of the decreein the plaintiff’s action against the executrix.
All allegations of fraud were withdrawn, although the affir-mative of the above issue would possibly impugn the transfer asbeing in fraud of creditors.
The defendants Harry de Mel and his wife recite the abovefacts in their answer, and add that there was and is other propertybelonging to the estate of W. Juwanis Fernando and available forseizure under the plaintiff’s decree against the executrix. Theirmeaning is that that property should be exhausted before recourseis had to the property conveyed to the first defendant. In spiteof this defence the plaintiff simply put in the papers relativeto the case. He called witnesses, but made no effort to contradictthe statement in the answer or to show that Juwanis Fernando’sestate was insolvent at the date of the transfer; When the case forthe defendants was closed, he proposed to call rebutting evidence,but the judge (in my opinion, properly) refused to admit it.
We were referred to both Roman-Dutch and English Law. Ifthere had been fraud, the transfer would have been reducibleunder any system of law, but in most cases the Paulian Actionwould not lie without proof that the deceased’s estate is insuffi-cient and the transfer in fraud of creditors. There is no sugges-tion here of fraud on the part of the executrix or the alienee.
There are cases in which, under Roman-Dutch Law, the PaulianAction was competent, even without proof of fraud, upon the
1901. .
July 10,
1 5, and 23,
Moncbeifp,
J.
1901.
July 10,15, and 23.
Monorbrpr,J.
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simple proof that the creditors had not got what was theirs. Voet(lib. XL1I. tit. 8, § 9) instances cases of legacies, donation mortiscausa, and fidei commissum. He says that is so quatenus lucenon ante preset an da quam soluto prive <ere alieno; eicut, si jamprcestita fuerint, et religua ceri alieno hand sufficiaut, utilis actiodanda sit. From this it appears that, even in cases which donot involve fraud, the creditors cannot follow property belong-ing to the estate of the deceased, which has passed from the handsof the executrix, without showing that the rest of the estate isinsufficient to meet their claims. In this case it does not appearthat the deceased’s estate was insolvent at the date of the transfer;it does not even appear that it is insolvent now.
We were referred by Mr! Jayawardene to two English cases. Inthe first (Spachman v. Timbrell, 8 Sim. 261) Timbrell the fatherby will devised leaseholds and freeholds to his son, appointing hisson and the plaintiff executors. Three years after the father’sdeath the son settled part of the property upon his wife andchildren in consideration of marriage. It was held that thesettlement was for valuable consideration, and that the case mustbe governed by the decision of Lord Eldon in Macleod v.Drummond (17 Ves. 152).
In Dillees v. Broadmead (2 D. F. and J. 576) decided in 1860,when personalty of the value of £6,497 had been left by thedeceased in trust, and was afterwards settled on his daughter’smarriage to the separate use of the daughter, Lord Campbell, C.J.,was at considerable pains to show that the settlement was tothe husband’s advantage, and that marriage was a valuable con-sideration for it. On the case itself he said (p. 574), “ Spademan" v. Timbrell and the other cases relied on by the Vice-Chancellor“ satisfactorily establish the doctrine that assets of a deceased debtor“ or convenantor settled bona fide in consideration of marriage‘‘are no longer specifically liable to the claims of creditors. And“ where personal property can be indentified, I do not think that in“ reason, or according to the authorities, any distinction can be made“ for this purpose between personal property and real property. ”The liabilities of the deceased’s estate are now charged uponboth real and personal assets. But it is said (Williams, Executors,9th ed., p 1,560—in reference to Lord Laydale's decision that,if the specialty creditors do not proceed against the heir or devisee,the latter may alienate; and in the hands of the alienee the landis not liable, though the devisee or heir remains liable, to theextent of t^e value of the land alienated)—that “ there does“ not appear to be any reason why this decision should not be“ applied to tffie construction of the statutes now in operation. ”
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It would appear that, a conveyance of real estate by an executrix l»01.bond fide in consideration of marriage—the estate of the deceased
for example not being insolvent—cannot be set aside at the
instance of creditors. From no point of view therefore does it j rappear that this action can succeed.
I think that the appeal should be dismissed, and the judgmentappealed from is affirmed with costs.
Lawrib, A.C.J.—
This is an action under section 247 to have it declared that theland seized is the property of the judgment-debtor in the presentcase.
The judgment-debtor was the executrix of the last will of thepresent defendant’s father. She had conveyed land to her daughter,the first defendant, in pursuance of the directions of the will,as a general rule an heir or devisee under a will is liable for theancestor’s or testator’s debts to the extent of the share of theinheritance or estate which has come into his hands, whether thatshare has passed to the heir by operation of the law of inheritanceor through the interposition of a conveyance by the executor ofthe deceased's will, so that at first sight it appeared to me thatthe creditors of the deceased were entitled to disregard the con-veyance and follow this property when in the hands of one of theheirs of the deceased debtor. But the defendant urges that theconveyance by the executrix to her was for valuable consideration,because the land was transferred to her on the occasion of hermarriage. Certainly if a land be conveyed before marriage by abridegroom to his bride or to marriage settlement trustees, or ifthe parents of the bride convey land to her and to the bridegroomor to trustees in consideration of the marriage, then such con-veyance would be for valuable causes.
But my difficulty here was that the conveyance says nothingabout a marriage.
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The executrix purports to give effect to the testator's intention.
If she' had executed similar deeds in favour of her other childrenon the same day, I think the land conveyed to them would nothave been put bevoDd the reach of their later creditors, and Idoubt whether the fact that the occasion of making this divisionof the family estate was the approaching marriage- of the daughter,and made it a conveyance for valuable consideration.
But relying on the authority of the English cases cited to us andreferred to in the judgment of my brother, I agree with him in ..affirming this judgment.