070-NLR-NLR-V-65-NAMBUWASAN-Appellant-and-DEONIS-APPU-et-al.-Respondents.pdf
Narnbuwasan v. Deonis Appu et al.
353
Present: Weerasooriya, S.P.J.
NAMEU WASAN, Appellant, and DEONIS APPU et al., Respondents8. C. 109/7960—C. R. Matara.. 6446
Sale of land—Condition for retransfer within a fixed ‘period on payment of a certainsum—Action by vendor for retransfer—Lis pendens not registered—Rightsof bona fide purchaser for value—Registration of Documents Ordinance (Cap.117), 88. 11 (1), 11 (3)—Deed of sale—Presumption of passing of valuableconsideration.
On 17th May 1957 A sold to B a land subject to A’s right to ask for retransfer■within one month upon payment of a certain sum. On 7th June 1957 Aconveyed to C his rights to obtain the retransfer. Within the stipulated periodof one month C brought into Court the required sum and sued B for the retransfer.C, however, did not register the lis pendens. Pending the action, and after thestipulated period, B sold the land outright to D, who bought it bona fide andfor valuable consideration and duly registered the deed of sale.
Held, that D acquired a good title to the land as against C. C was thereforenot entitled to obtain a retransfer from B.
Held further, that where a transaction embodied in a deed is on the face of ita sale, the deed itself constitutes prima facie evidence of passing of valuableconsideration. (Diyes Singho v. Herath, 64 N. L. R. 492, referred to.)
354
WJ3ERASOORIYA, S.2?.J.—Nambwoatan v. JOttmU Apjm «i el.
Appeal from a judgment of the Court of Bequests, Matara.
S. W. Jayewardene, Q.C., with D. 8. Wij&u»ard&ne,iot plaintiff-appellant.A. F. Wijemanne, for 2nd and 3rd defendants-reepondenta.
Our. adv. iwit.
August 31, 1962. Wmcrasoomya, S.P.J.—
This is an action by the plaintiff-appellant for an order on the 1stdefendant-respondent to convey to him a half-share of the land describedin the schedule to the plaint. In the alternative he prayed that suchconveyance be executed by Court. The land in question bad been soldby H. G. Gun&dasa and H. G. Charles Appuhamy on deed P3 of the17th May, 1957, to the 1st defendant for Rs. 200 subject to the right ofthe vendors to ask for a re-transfer within one month on payment of thepurchase price together with interest at 15 per cent. Gunadasa by hisdeed P2 of the 7th June, 1957, conveyed to the plaintiff his rights toobtain a re-transfer on P3. The plaintiff averred that by virtue ofP2 he was entitled to obtain from the 1st defendant a re-conveyance ofa half-share of the land, and that on the 13th June, 1957, he throughhis proctor tendered a sum of Rs. 102 • 50 (which represented one half ofthe purchase price and interest thereon as at that date) to the 1stdefendant and called upon him to accept the same and execute aconveyance of the half-share of the land, which he failed to do. Thesum of Rs. 102 ’ 50 the plaintiff brought into Court when filing his plaint.
In the original plaint, filed on the 3 5th June, 1957, only the 1st defendantwas sued. The Court issued summons on him returnable on the 2ndSeptember, 1957. There is nothing to show that summons was servedon the 1st defendant. Apparently the process-server had reported thatthe “ defendant ” refused to accept the summons saying that the namewas incorrect. It is not clear whether the “ defendant ” referred to wasthe 1st defendant or some other person on whom service of summonswas attempted. However, the 1st defendant appeared in Court on thesummons returnable date and was given time till the 21st October, 1957,to file answer. In the answer, which was eventually filed by him on the17th February, 1958, he stated that after the lapse of one month fromthe date of the execution of P3 he, as the owner of the land, sold it toa third party whose name he did not disclose. As it transpired later,that party is the 2nd defendant, the deed by which the transfer waseffected is 3DZ of the 19th June, 1957, and the 2nd defendant himself,by deed 3D2 of the 12th January, 1958, had transferred the land to the3rd defendant. 3D1, on the faoe of it, is an outright sale of the landfor Rs. 800 of which, according to the notary's attestation, Rs. 500 waspaid on execution of the deed and the balance aclmowledged by thevendor to have been previously received. 3D2 purports to be a salefor a consideration of Rs. 200 subject to the right of the vendor to obtaina retransfer within one year on payment of the purchase prioe withinterest at 12 per cent. The notary has attested that the full coned*deration of Rs. 200 passed in his presence.
WEERASOORIYA, S.P.J.—Namhuwasan v. Deonia Appu et al.
355
The 2nd and 3rd defendants were thereafter joined as parties to theaction on an amended plaint filed on the 3rd November, 1958, but norelief was claimed as against them. Paragraphs 6 and 7 of that plaintcontain allegations that deed 3D1 had been executed by the 1st defendantacting fraudulently and in collusion with the 2nd defendant, and that~EKe~latter was not a bona fide purchaser. Paragraphs 8 and 9 allegefraud and collusion between the 1st, 2nd and 3rd defendants in regard tothe execution of 3D2, and that the 3rd defendant was not a bona fidepurchaser.
Deeds P2, P3, 3D1 and 3D2 have been duly registered. In theremarks column of the folio in which P3 is registered appears the state-ment “ Subject to a re-transfer within one month from date of deed. ”The present action, which was filed prior to the execution of 3D1 (19thJune, 1957) and 3D2 (12th January, 1958), was not registered as aUs •pendens until the 8th November, 1958. One of the questions fordecision in this case is whether in the circumstances the lis pendens isbinding on the 2nd and 3rd defendants, the transferees on 3D1 and3D2 respectively. Section 11 (1) of the Registration of DocumentsOrdinance (Cap. 117) provides that no lis pendens affecting or relatingto land shall bind a purchaser unless it is duly registered. Section 11 (3)defines a “ purchaser ” as any person (including a mortgagee or lessee)who for valuable consideration takes any interest in or charge on land.In view of these provisions Mr. Jayewardenefor the plaintiff concededthat if 3D1 and 3D2 were, as they purport to be, for valuableconsideration, the 2nd and 3rd defendants would not be bound by thelis pendens and the plaintiff’s action must fail.
The trial Judge has held that the 2nd and 3rd defendants are bona fidepurchasers for value without notice and that the 3rd defendant, therefore,acquired a good title on 3D2. Mr. Jayewardene submitted that thereis no evidence to support the finding that the transfers 3D1 and 3D2were for valuable consideration. Relying on a recent judgment of thisCourt in Diyes Singho v. Herath 1, learned counsel contended that thenotary’s statement in the attestation of those deeds regarding the passingof consideration is by itself insufficient, to prove that 3D1 and 3D2 werefor valuable consideration. In that case no evidence was called by eitherside at the trial, and my brother T. S. Pemando held, in regard to a deedpurporting to be a sale which had been marked in evidence, that thenotary’s statement in the attestation that considertion passed wasinsufficient to establish the truth of the payment of such consideration,and that there was no proof, therefore, that the deed was for valuableconsideration. If I may say so with respect, the question whether, apartfrom the statement of the notary regarding the passing of consideration,the deed itself did not constitute prima facie evidence of what it purportedto be, namely a deed of sale, does not appear to have been considered inthat case. No doubt, where a transaction embodied in a deed is on theface of it a sale, and notwithstanding a statement in the attestation thatconsideration passed, it is open to a Court to hold that the surrounding
1 <1962) 64 N. L. R. 492.
356
Disaanayake «.
circumstances negative a genuine *B&te and point to the transaction beingmerely a colourable one. In lie present ease, deeds 3D1 and 3D2 are,on the face of them, deeds of sale for valuable consideration, even if thestatement in the attestation that consideration passed be disregarded.There is, in addition, the evidence of the 3rd defendant who said that theland in question had been sold to him by the 2nd defendant on 3D2.There was no cross-examination on the 3rd defendant’s evidence that thetransaction between him and the 2nd defendant was one of sale. The3rd defendant also stated that at the time of his purchase he got hisnotary to examine the encumbrances relating to the land. Even thoughthe search would have disclosed, that deed P 3 was executed subject to theright of the vendors to obtain a re-transfer, the period during which are-transfer could have been obtained had already elapsed when 3D1 and3D2 were executed. The allegations against the 2nd and 3rd defendantsin the amended plaint i^at they acted fraudulently and collusively withthe 1st defendant were ndt proceeded with by the plaintiff at the trial andno issues regarding them were framed. It seems to me, therefore, thatthe trial Judge had ample grounds for his finding that the 3rd defendantwas a bona fide purchaser for value without any notice and thathe acquired a good title to the land on 3D2, and I see no reason todisturb it.
On this finding alone the appeal must be dismissed. Even on thequestion whether in terms of P 3 the 1st defendant was under any obliga-tion to re-transfer only a half-share of the land, the trial Judge has heldagainst the plaintiff. The correctness of this finding was also canvassedby Mr. Jayewardene on the strength of several authorities which hecited. I do not think it necessary, however, to decide this question.
This appeal is dismissed with costs.
Appeal dismissed.