Visaladehyjrillai v. Sivapakkiammal.
1938Present: Poyser S.P.J. and Koch J.
VISALADCHYPILLAI v. SIVAPAKKIAMMAL.
21—D. C. Trincomalee, 2,121
Prescription—Donation subject to a condition—Trust—Claim by beneficiary—
Ordinance No. 22 of 1871, s. 8.
Where a deed of gift was subject to the following among other conditions.
The said donor shall have the power to sell mortgage or otherwisealienate or encumber the said lands and premises.
That, in the event of the said donor dying leaving behind the saidlands and premises, then it shall be obligatory on the said donee to payout of the said lands and premises a sum of five hundred rupees to S.
Held, that, the deed created a trust in favour of S and that a claim torecover the money was prescribed in 10 years under section 6 of thePrescription Ordinance.
HIS was an action to recover a sum of Rs. 500 due to the plaintiffunder a deed of gift No. 966 of June 25, 1929. The material parts ofwhich are set out in .the head note. The defendant pleaded prescription.The learned District Judge gave judgment for the plaintiff.
KOCH J.—Visaladchypillai v. Sivapakkiammal.
S. J. V. Chelvanayagam (with him M. Tirucheivam and V. Manica-vasagar), for defendant, appellant.—The obligation to pay the sum ofRs. 500 is a mere parol undertaking and prescribed in three or at most insix years (see section 11 and section 3, Prescription Ordinance), the latterperiod if it is to be regarded as a promise in writing. The cause of actionaccrued to the plaintiff immediately upon the death of the donor whenthe donee became liable to fulfil the condition in the deed No. 966 ofJune 25, 1929.
N. Nadarajah (with him G. E. Chitty), for plaintiff, respondent.—We have here the clearest possible case of an express trust. The wholetransaction seems almost in illustration of the definition of a trust asset out in section 3 of the Trusts Ordinance. The _ words “ out of the saidlands and premises ” can mean one thing alone and that is that the proper-ty is bound in the hands of the donee under the trust and the donee’s bene-ficial interest therein is to that extent diminished in favour of the cestuique trust, namely, the plaintiff. It may be that the donee has some otherfund out of which she can pay the plaintiff the Rs. 500. She will, if shedoes pay, get the property free, but in no case will the obligation annexedto the ownership of this property be dissolved without such payment.The property will otherwise have to be sold and the money paid out . ofthe proceeds in order to comply with the terms of the deed creating thetrust. A refusal to pay the sum would be in fraud of the trust.
M. Tirucheivam., in reply.—A gift subject to a condition is all we havehere. It is a class of donation well known to the Roman-Dutch law andin such a case the Court will apply the common law in order to determinethe rights and liabilities of the parties who must be deemed primarily tohave intended to create only a common law obligation. The idea of atrust which is really the creation of another legal system should not beimported into the consideration of a transaction which falls well withinthe limits of our common law.
April 4, 1938. Koch J.—
The respondent claimed a sum of Rs. 500 -as due to her in terms of adeed No. 966 of June 25, 1929. That under the deed she was entitled tothis sum is not denied, but the appellant contends that her claim has beenprescribed by reason of the long delay in the institution of these pro-ceedings.
The deed No. 966 gifted the four properties described in the schedule to •the appellant who, jo put it briefly, was directed to pay a stun of Rs. 500to the respondent.
It is argued by Counsel for the appellant that his client succeeded asdonee to the ownership of the properties on the death of the donor subjectto the condition that she had to pay a sum of Rs. 500 to the respondent.The respondent’s claim, he maintained, was therefore to .enforce thecondition and would be prescribed in six years at the latest dating fromthe death of the donor. The donor died on July 3, 1929, and this .actionwas instituted on February 12,1937—eight years later.
It may fairly be argued by the appellant that if the deed only containeda condition, the plaintiff’s claim would come under section 11 of. thePrescription Ordinance and would thus be prescribed in three years, but,.
' 116KOCH J.—Visaladchypillai v. Sivapakkiammal.
considering that eight years had elapsed, the appellant was content topermit the claim being regarded as controlled by section 7 in which theperiod of prescription is given as six years.
The respondent’s Counsel, on the other hand, argues that his claim isto enforce a trust and, therefore, the period is regulated by section 6 whichmakes it ten years.
As the terms and covenants of the deed are of the utmost importanceto the decision of this point, it is necessary that they should be set out.They are as follows: —
“ No. 966 ”.
“ Know all men by these presents that Kathirkamathampy Chella-pillai of Division No. 6 of Trincomalee (hereinafter called the said donor)in consideration of the love and affection which he has and bears unto hisdaughter Visaladchypillai of Division No. 6, Trincomalee (hereinaftercalled the said donee) doth hereby grant, assign, transfer, set over andassure unto the said donee all the lands and premises described inschedule hereto subject to the conditions and covenants hereinaftercontained together with all rights members and appurtenances what-soever to the said premises belonging or usually held or enjoyedtherewith or reputed to belong or be appurtenant thereto, and all theestate, right, title, interest, claim and demand whatsoever of him thesaid donor in and to the said premises.
“ To have and to hold the said premises with their and every of theirappurtenances which are of the value of Rupees Ten thousand(Rs. 10,000) unto her the said- donee, her heirs executors, adminis-trators and assigns absolutely forever.
“ 1. That the said donor doth hereby reserve to himself the right ofenjoying the rent, issue and profit of all the lands and premises describedin schedule hereto.
“ 2. That the said donor shall have the power to sell, mortgage orotherwise alienate or encumber the said lands and premises describedin schedule hereto.
“ 3. That in the event of the said donor dying, leaving behind thesaid lands and premises then it shall be obligatory on the said donee topay out of the said lands and premises a sum of Rupees Five hundred(Rs. 500) to Sivapakkiammal, daughter of Rasandiramudaliar and a■ sum of Rupees Fifty to Kannamma, widow of Murkappar ”.
It will be seen from the foregoing that the grant is made subject toconditions to follow. This, it is claimed, is in favour of the appellant.Further, in the habendum clause the donee, her heirs, executors, adminis-trators, and assigns receive the premises “ absolutely forever ”, and this,it is argued, disproves the intention to create a trust.
The point is not free from difficulty, but after careful consideration .1have come to the conclusion that a trust in favour of this sum has beencreated in favour of the respondent. I have based my conclusion oncovenant 3. The precise words are that “ the donee shall pay out of thesaid lands and premises a sum of Rs. 500Now, what do these words mean? In my opinion, they mean thatthe Rs. 500 should either come out of the income accruing from theproperties donated or, if all or any of the properties have to be sold, this
KOCH J.—Visaladchyjrillai v. Sivapakkurnimal.
sum should be paid out of the proceeds of such sales. It must be notedthat the aggregate value of the properties donated was Rs. 10,000 andalso that the donor died indebted within a few days of the execution ofthe gift and that it was admitted that some of the lands donated had to besold to pay off his debts. The donor would have been well aware of hisfinancial position and it is reasonable to suppose that he felt that if hiscreditors could be staved off for some time, these valuable propertieswould have furnished a sufficient income from which the payment to therespondents could have been made, but that if, on the other hand, theyhad to be sold, the' payment should have to be made out of the proceeds.Some meaning must be given to the important words “ out of the lands!and premises”, and I cannot see what other meaning can be given. Ifthen the meaning I have given is correct, there can be little doubt that atrust has been created.,
Our Trusts Ordinance, No. 9 of 1917, defines “ a trust ” in section 3 as“an obligation annexed to the ownership of property, and arising out ofa confidence reposed in and accepted by the owner, or declared andaccepted by him, for the benefit of another person; or of another personand the owner of such a character that while ownership is nominallyvested in the owner, the right to the beneficial enjoyment of the propertyis vested or to be vested in such other person, or in such other personconcurrently with the owner ”.n
Now, as the legal ownership has to be vested in the person who isdesignated the owner, language, however forcible and full, may be invokedto vest that ownership without affecting the intention to create a trust infavour of another, and this will explain- the use of the words “ absolutely• forever ”. This done, there must. be words to indicate a beneficialenjoyment of the whole or part of that property by another. It wouldappear that the words “ out of the said lands and premises ” satisfies thisrequirement. There is confirmation of this view to be found in section 22of the 28th volume of Halsbury at page 16. The section reads: “ Whereproperty is given to a person upon condition that he does a certain act orconfers a certain benefit on another person, the condition may constitutea trust, if it is directed to be or must necessarily be performed and satisfiedout of the property and consequently imposes a fiduciary obligation inrespect of the property”. A number of decisions are referred to insupport.
I should wish to emphasise firstly the words “ upon condition ” in thepassage quoted, for this will explain the presence of the words "subjectto the conditions” in the deed in question; and secondly, the requirementthat the condition must be “performed and satisfied out of the property”.We have these words in clause 3 of the deed. The essentials of a trustbeing present, I hold that a trust has been created and that the respondentcan bring his claim under section 6 of the Prescription Ordinance.
The period being ten years, the action was instituted in time and theappeal therefore fails and must be dismissed with costs.
Poyser S.P.J.—I agree.
VISALADCHYPILLAI v. SIVAPAKKIAMMAL