WEERAMAN v. DE SILVA

029-NLR-NLR-V-22-WEERAMAN-v.-DE-SILVA.pdf


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Present: De Sampayo J. and Dias A.J.
WEERAMAN u DE SILVA.
398—D. 0. Matara, 8,606.
Trust—Execution-creditor . buying property throughanother—Civil
Procedure Code, ss. 272 and 282—Partition action—Does decreewipe out trust'f
The plaintiff, an execution-creditor, obtained an order of Courtto bid for property at the execution sale. But with a view to pur-chasing the property at a price less than the appraised value,'which was the limit placed as a condition in the order issued to him,he purchased the property through the defendant. The sale wasconfirmed in due course, and Fiscal’s transfer was issued to defend-ant.
Held, that the plaintiff was entitled to sue the defendant toenforce the trust.
A land, a share of which was bought by the defendant in trustfor the plaintiff became the subject of a partition action, was soldunder the partition decree, and a sum of money was in Courtrepresenting-the-share in question. The plaintiff was declaredentitled to it. The partition decree had not the effect of wipingout the trust.J
rMHE facts are set out in the judgment of the Acting DistrictJudge (G. P. Keuneman, Esq.):—
The defendant inthis case purchased the lands mentioned in *he secondparagraph of the plaint at a Fiscal’s sale held on' March ‘' 7, and
has obtained Fiscal’s transfers for all the lands so sold.
The plaintiff in this case sues the defendant for a re-transfer of the)lands marked A to H in the second paragraph of the plaint, and fora sum of Rs. 1,200, or such sum as the Court may find due to him inconnection with case No. 7,872, on the ground that the lands, thoughbought in the defendant’s name, were actually purchased for and onbehalf of the plaintiff and with the plaintiff’s money and in trust for him,
The lands were sold.under writ in execution of a decree in favour of •plaintiff entered in case No. 6,280 of this Court. The plaintiff appliedfor and obtained an order enabling him to bid for the lands at the saidsale. The plaintiff, though armed with this order, was disinclined topurchase the lands, as according to th e ord er given by Court he would haveto purchase the lands at the appraised value. The plaintiff states thatas there were disputes as to the exact shares the judgment-deb tors wereentitled to, he did not wish to purchase the lands at the appraised value,and so he got the defendant, a cousin of his, to bid for and purchase thelands at the Fiscal’s sale.
The lands were sold for Rs. 298; the land called Liyana-arachchige-watta having fetched Rs. 28S and the rest of the lands being sold forRs. 13.
1880,
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1920*‘ Fiscal’s transfers were obtained for all the lands, but when they were
—■obtained, one. of the lands, Liyana-arachchigewatta, was the subject.
Weera/man v. matter of a partition case (D. O. 7,872 of this Court).
The plaintiff states that owing to the pendency of the partition casehe could not obtain a transfer of Liyana*arachchigewatta, which wasapparently the most valuable land; he, therefore, got the defendant tointervene in the case, and that he (the plaintiff) took all the necessarysteps in the case and spent all moneys required for the case.
The land Liyana-arachchigewatta was sold under the decree in caseNo. 7,872, and there is a sum of Rs. 981 ■ 35 to the credit of the defendantin that case, which the plaintiff has prevented the defendant from with-drawing by an injunction obtained in this case.
The plaintiff in support of his case, that the lands were purchasedwith his money and in trust of him, has produced from his custody allthe receipts for money paid in connection with the Fiscal’s sale (P1, P %and P4 to P7). Thedocumenfcs P5 to P7, it will benoticed,are receiptsgiven in plaintiff’s favour. The Fiscal’s transfers were also producedby the plaintiff from his custody, and it is admitted by the defendantthat the payments made to the surveyor for plans to accompany theFiscal’s transfers were made by the plaintiff.
I think that plaintiff has conclusively proved his case. The docu-ments produced .by the plaintiff, his own evidence, and that of hiswitnesses clearly prove that the lands were bought by the defendantin trust for the plaintiff, and that the payments were all made by plaintiff.
Mr. de Kretser has commented on the fact that the letter of demandsent by the witness James Senaratne is about the same time as theissue of summons in this case, but I do not think that that point helpsthe defendant’s case in any way. It may be that the plaintiff, irritatedby the treachery of the defendant, had asked James Senaratne also topress for the money due.‘ r
I accept the evidence of Mr. Gunaratne and of the other witnessescalled by the plaintiff. The defendant has not given evidence himselfor calls any witness to prove that he made any payments. His positionat the trial was that he had sold a land to plaintiff on P 20 and that asum of Rs. 300 was retained by plaintiff, which sum of money theplaintiff had paid on behalf. of defendant. I do not attach muchimportance to this suggestion. The defendant in his answer had madeno such statement, and it is apparent that being forced to admit thatplaintiff paid the money the defendant had Subsequently thought ofthis defence.
i
The next point raised by the defence is that plaintiff cannot ask fora re-transfer as there is no notarial agreement. . I do not; think I needdwell on this point at any length, as a similar case (D. C. 6,624) wasdecided by the Supreme Court on December 17, 1915, where it was heldthat the plaintiff Was entitled to obtain a re-transfer.
I answer the issues as follows:—
Issue 1.—Yes.
Issue 2.—Yes.
Issue 3.—The plaintiff is entitled to claim a conveyance of the landsA to H mentioned in the plaint, and, that plaintiff is entitled to themoney in deposit in case No. 7,872.
I give judgment for plaintiff. Decree to be entered; (1) declaringplaintiff entitled to the lands A to H in the second paragraph of theplaint; (2) that defendant be ordered to execute a conveyance in favour ofplaintiff for the said lands; (3) that plaintiff be declared entitled to thesum of Rs. 981'35 in deposit in case No. 7,872 of this Court; (4) For costs*
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A. St. V. Jayawardene (with him H. V. Perera), for the appellant.
H. J. 0. Pereira, for the respondent.Jme 10, 1920. De Sampavo J.—
Cur. adv. vuiU.
We have to consider a point of law which was not taken beforethe District Court or in the petition of appeal. Bnt as its decisiondoes not depend upon any investigation of any new facts, we should,I think, dispose of this appeal on a consideration of that point.The plaintiff brought this action against the defendant to have itdeclared that shares of certain lands transferred to the defendantby the Fiscal were, in fact, the property of the plaintiff, and tohave a reconveyance made in his favour by the defendant. Itappears that the plaintiff was the execution-creditor in a previouscase, and on a writ issued by him the shares in question were soldat the execution sale. The defendant, as the last bidder at the sale,was declared the purchaser, and the conveyances were issued to himin the usual course. But it appears that the plaintiff was the realpurchaser, and had furnished the money for the payment of theprice of the land, and he says that he purchased the shares in thename of the defendant for his convenience, and that the defendantheld them for him and is now bound to transfer at his request.The point of law arises in this way. Under section 272 of the. Civil Procedure Code' the holder of a decree in execution of whichproperty is sold, may, with the previous sanction of and subject tosuch terms as may he imposed by the Court, bid for or purchase theproperty. It appears that the plaintiff, as execution-creditor,applied for and obtained such an order, but, with a view to pur-chasing the property at a price less than the appraised value,which was the limit placed as a condition in the order issued to'him,he interposed the defendant and purchased the property throughhim. It is contended that, under section 272, the plaintiff wasprohibited from purchasing, excepting at the appraised pricewhether directly or indirectly. Counsel for the defendant reliesfor this contention on certain principles stated in the English textbooks ; for instance, in Snell on Equity, 15 ed., p. 87, it is stated that“ no trust will result where public policy would be thereby defeatedas where the subject-matter of the conveyance is a British ship oris land given to qualify the grantee to a vote at a parliamentaryelection or is money deposited in a third party’s name;in evasionof the Savings Bank Acts, in all which cases the apparent doneeretains the benefit for himself.” In CheMappa v. Selvadurai1section. 272 of the Civil Procedure Code was construed as enactingthat a decree-holder may only bid for and purchase the propertywith the previous sanction of the Court and in accordance withthe terms mentioned in the order. This decision is somewhat in
1920.
Weeraman «.De Silva
1 (2912) 16 N. L. R. 139.
( no )1920. oonfliot with the previous decision referred to in the judgment. 'Da 8amfato ^or P111?086 °* this app®*! we may accept that decision soj.far as the meaning of'section 272 is concerned, that is to say, it would
Weermnan eva8*on °* se°ti0n 272 for an execution-creditor to purohase
DeStiva* at the execution sale either without the sanction of the Court or incontravention of the tepms imposed, by the Court, whether hedoes so himself or through an agent). But the same decision heldthat any objection to a Fiscal’s sale for the disregard of the provi-sions of section 272 must be taken within time under section 282 ofthe Civil Procedure Code, and that after the confirmation of thesale any objection tothesale wouldcometoo late. In the present casenot only was no objection.taken in connection with the executionsale in the previous case but the sale was confirmed, and theFiscal’s transfer has, in fact, been issued to the defendant. Conse-quently, the latter part of the decision applies to this case. It istoo late for the defendant to take the objection that the plaintiffevaded section 272 of the Civil Procedure Code and therefore the sale*by him in the defendant’s own name was invalid. The subsequentcase of Silva v. Siadoris1 is a direct authority against the appel*lant. The facts of this case are on all fours with the facts in thatcase,, and it was held there that the plaintiff in that case wasentitled to sue the defendant to enforce the trust and to obtain areconveyance of the property in his own favour. I am content tofollow that decision, and to hold that the plaintiff in this case issimilarly entitled. There is one other point which has been urgedon behalf of the defendant. It appears that one of the lands, theshare of which was sold at the execution sale, became the subjectof a partition action. The land was sold under the decree, and a sumof money is now in Court representing the share in question andostensibly payable to the defendant, who was a'party to the partitionaction. The plaintiff here, in addition to the claimforreconveyance,has asked that that sum of money be declared to belong to himand be paid to him. This relief was. also granted by the DistrictJudge. It is contended that the partition decree wiped out any, trust attaching to the share in favour of the plaintiff, and that,therefore, he is not entitled to this sum of money. But I think thecontention is not sound. On this point such cases as Sultan v.Simnadian 2 may be referred to. In that case the trustee had beenthe purchaser at the sale under the partition decree and hadobtained a certificate of sale, and it was held that the certificateof sale did not possess such a conclusive effect as to prevent aperson from claiming the property sold on the ground of a secrettrust between himself and the purchaser. In the course of thejudgment Wood Renton J. made this observation in reference to aprevious decision in Catherina Bamy v. Babahamy2 that, when V
V 1 (1915) 1 0. W. R. 225.' • (1911) 15 N. L* R. 135.
8 0907) 3 A, C1 R. 33.
that case said the intention of the Partition Ordinance was to give ' jam.
an indefeasible title to .the purchaser, it intended to say no more
than that the title of the purchaser was indefeasible as regards the Sa^wayoestate that passed to him under the decree. In the same way—-■.
the title of the. defendant may be said to be conclusive. He,”
nevertheless, owns the property subject to the original trust. Ithink the plaintiff is entitled to draw the money representing theshare which was the subject of the trust. I would, therefore, dismissthe appeal, with costs.
Dias A.J.—I agree.
♦
Appeal dismissed.