045-SLLR-SLLR-2004-V-3-PODI-MENIKA-v.-HEEN-MENIKA.pdf
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Podi Menika v Heert Menike
289
PODI MENIKAvHEEN MENIKECOURT OF APPEALDISSANAYAKE, J.SOMAWANSA, J.
CA 846/96 (F)
DC Kandy L/17260APRIL 29, 2003JUNES, 2003
Quatimet action – Share to be allotted in a partition case – Declaration thatparty is entitled to that interest – Laesio enormis – Unjust enrichment – Voidor voidable contract – Identification of the land – Civil Procedure Code, section41 – Proof of passing of valuable consideration – Necessity? – Registration ofDocuments Ordinance section 7 (1) – Evidence Ordinance, section 16 -Omnia praesummuntuer rite essa acta.
Quatimet action was instituted seeking a declaration that the plaintiff-appellantis entitled to the land interest being the interests the defendant-respondentwas entitled to in P/9575 and that a declaration that she be entitled to suchshare that the defendant-respondent would be allotted by the final decree byvirtue of rights flowing on two deeds.
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The defendant-respondent denied the position taken up by the plaintiff-appellant. The-trial Judge dismissed the action.
On appeal it was contended that, the trial Judge has misdirected himself inapplying the principles of laesio enormis – Deed No. 32570, that, Court hasfailed to identify the land with certainty, and that there was no proof of paymentof consideration in Deed – 32570.
Held:
Per Dissanayake, J.:
"Laesio enormis is a well recognised principle in the Roman Dutch Law toremedy injustice caused to a seller of a thing due to his ignorance or lack ofknowledge. This principle could not apply to a situation where the seller wasaware of the true value of the property at the time of execution of the deed.
A transferor who institutes an action on the principle of laesio enormishas to do so without delay. The principle of laesio enormis is availableas against a transferee of a deed and not against a third party whohad become entitled to the property on a deed granted by thetransferee.
In order to succeed in an action for revision of a sale brought by theseller on the ground of laesio enormis, he must prove that theproperty was at the date of sale, worth double the price thedefendant paid for it.
As the defendant-respondent had admitted in her evidence that at thetime of the execution of the deed she knew that the true value of theproperty was Rs. 60,000/- though the consideration in the deed beingRs. 20,000/- remedy under the principle of laesio enormis is notavailable to the defendant-respondent.
The land has been described in the schedule to the plaint with itsname by metes, boundaries and the extent – there is no violation ofsection 41.
Held further:
Proof of the existence of a statement in the deed by the Notary thatconsideration was paid is not sufficient to establish the truth of thepayment of such consideration.
Per Dissanayake, J.:
If a deed is on the face of it regular, it will be presumed that all formalitiesrequired by law were complied with in its execution. In the absence of an issueto the effect that the formalities required to be followed by law were notfollowed it cannot be taken up as an issue for the first time in the Court ofAppeal.
APPEAL from the District Court of Kandy.
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Podi Menika v Heen Menike
(Nimal Dissanayake, J.)
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Cases referred to:
Gooneratne v Philip – 5 NLR 268.
Jayawardane v Amarasekera – 15 NLR 280.
Diyes Singho v Herath – 64 NLR 492.
Tilakaratne v Samsudeen – NLR 69.
Daya Guruge for plaintiff-appellant.
Dr. Jayantha de Almeida Gunaratne for defendant-respondent.
September 5, 2003NIMAL DISSANAYAKE, J.
This is a quatimet action instituted seeking inter alia, adeclaration that the plaintiff-appellant is entitled to the land interestdescribed in the schedule to the plaint, being the interests thedefendant-respondent who was the 2nd plaintiff in District Court ofKandy Partition Case No. P 9575 was entitled to get under theinterlocutory decree, and a declaration that she is entitled to suchshare that the defendant-respondent would be allotted by the finaldecree in D.C. Kandy case No. 9575/P, by virtue of rights flowingon deed No. 8897 of 11.03.1988 and deed No. 32570 of 17.01.89.
The defendant-respondent by his answer whilst denying theaverments in the plaint prayed for dismissal of the action.
The case proceeded to trial on 13 issues and at the conclusionof the trial the learned District Judge dismissed the action.
It is from the aforesaid judgment that the plaintiff-appellant haspreferred this appeal.
In the petition of appeal filed by the plaintiff-appellant it has beencontended that the learned District Judge had erred in dismissingthe action on the grounds that the learned District Judge hasmisdirected himself:-
(a) in applying the principles of Laesio-enormis to thetransaction based on the deed bearing No. 32570 of12.10.1989.
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(b) in concluding that he had failed to identify the land in suit withcertainty in the plaint in violation of section 41 of the CivilProcedure Code.
In the arguments of the appeal before this Court learnedCounsel appearing for the plaintiff-appellant has taken up a furtherground of appeal, to the effect that there was no proof of passing ofvaluable consideration in respect of deed No. 32570 of 17.01.1987(P2).
At the commencement of the trial execution of deed No. 8897 of
of Notary Public K.B. Ranasinghe by the defendant-respondent has been admitted by the parties.
It is the plaintiff-appellant's case that the defendant-respondentwas the second plaintiff in the District Court Kandy partition actionbearing No. 9575/P. During the pendency of the said action thedefendant-respondent had transferred her undivided shares orwhatever share that she will be allotted in D.C. Kandy Partitioncase No. 9575 to Medagoda Herath Mudiyanselage KarunaratneBanda by deed No. 8897 dated 11.03.1988, attested by NotaryRanasinghe. (P1).
The transferee on deed No. 8897 (P1) by deed No. 32570 of
(P2) attested by Notary Ritigahapola conveyed allrights in respect of land called Uguressapitiya Hena to the plaintiff-appellant and rights that will be allotted in case No. 9575/P.
The plaintiff-appellant testified in Court of her purchasing theabove rights from Herath Mudiyanselage Karunaratne Banda ondeed P2 for a consideration of Rs. 20,000/-' She produced thejudgment in the District Court of Kandy partition action bearing No.P/9575 (P3), the interlocutory decree (P4) and the final scheme ofpartition (P5). The final plan was produced marked P6. Thesedocuments establish that the defendant-respondent who was the2nd plaintiff in case No. 9575/P, had been allotted – Lot No. 10 witha portion of the house B2 and Lot No. 12 in the final partition planNo. 1227 (P6).
The defendant-respondent took up the position that the value ofthe property in suit was Rs. 60,000/- and she stated further thatdeed No. 8897 (P1) was executed as a result of a transaction that
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was entered into by her late husband, and took up the plea of laesioenomis and unjust enrichment as against the plaintiff-appellant.
Laesio enormis has been described by Grotius as:
"If the seller or purchaser has been prejudiced in the price tothe extent of more than half the real value, even though nofraud has been perpetrated on either side the party soprejudiced may give the other the option of either cancellingthe sale or of increasing or reducing the price in accordancewith the real value. This mode of restitution applies to almostall contracts." Grot 3(17-1-5).
Laesio enormis is a well recognised principle in the Roman-Dutch law to remedy injustice caused to a seller of a thing due tohis ignorance or lack of knowledge.
This principle will not apply to a situation where the seller wasaware of the true value of the property at the time of the executionof the deed, however the property was sold at a lesser price.
The remedy available to an aggrieved party under this principleis not confined to cancellation of the contract but also damages. Insuch a situation the contract is not void but is voidable. Therefore atransferor who institutes an action on the principle of LaesioEnormis has to do so without delay. The principle of Laesio enormisis available as against a transferee of a deed and not against a thirdparty who had become entitled to the property on a deed grantedby the transferee.
It has been held in Gooneratne v Philip) that in order tosucceed in an action for rescission of a sale brought by the selleron the ground of enormis Laesio the plaintiff must prove that theproperty was at the date of the sale, worth double the price thedefendant paid for it.
The defendant-respondent in this case has failed to establishthat the value of the property the time of sale was worth double theprice the transferee paid for it.
Further the defendant-respondent had conceded in herevidence that she was aware of the value of the property to be Rs.60,000/-. This principle is available only to remedy a party who had
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been prejudiced owning to his ignorance or due to his lack ofknowledge of the real value of the property. In the case ofJayawardene v AmarasekeraW it was held that a person whoknows the value of the property, is not entitled to a rescission of thesale, merely by reason of the fact that the price at which he hassold it, is less than half its true value.
The defendant-respondent in her evidence had admitted that atthe time of execution of deed P1, she knew that the true value ofthe property was Rs. 60,000/-. Hence the remedy under theprinciple of laesio enormis is not available to the defendant-respondent in this case.
The land in suit has been described in the schedule to the plaintwith its name, by metes, boundaries and the extent. This action isa quatimet action instituted to obtain the interests of the defendant-respondent who was the 2nd plaintiff in the partition action bearingNo. 9575.
The plaintiff-appellant has produced the judgment, interlocutorydecree (P4) the final partition decree (p5) and the final partitionplan bearing No. 1272 (P6). In terms of the interlocutory and finaldecrees the defendant-respondent has been allotted Lots No. 10and No. 12 along with a portion of a house being Lot B(2) of thepartition plan No. 1272 (P6).
In the schedule to the plaint the land claimed by the plaintiff-appellant has been described by name, metes, boundaries and theextent. Partition plan No. 1272 (P6) has described the land in suitas Lot No. 10 and Lot No. 12, the extents of the two blocks of landis also depicted in plan (P6).
Therefore there is no merit in the arguments of the learnedCounsel appearing for the defendant-respondent that the plaintiff-appellant had failed to identify the corpus and hence the plaint wasin violation of section 41 of the Civil Procedure Code.
It shall now consider the additional point taken up by learnedCounsel appearing for the plaintiff-appellant that there was no proofof payment of consideration in deed (P2).
It is of significance to note that there was no issue framed on thismatter and the matter was not taken up before the District Court by
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defendant-plaintiff. It has been taken up for the first time in thearguments of this appeal. Learned Counsel adverted attention ofCourt to the evidence of the plaintiff-appellant to the effect that hecould not remember whether consideration was paid. However, theplaintiff-appellant's father stated to Court that the consideration waspaid at the time of execution of the deed in the presence of theNotary Public. It is to be observed that this evidence of the plaintiff-respondent's father is contradictory to the attestation clause of theNotary who attested deed (P1) in which he had stated that noconsideration passed before him. Learned Counsel for thedefendant-respondent argued that therefore this Court shall setaside deed P1. He cited the decision in the case of Diyes Singho vHerath® where it has been held that the plaintiff is not absolvedfrom proving that valuable consideration had been given. LearnedCounsel further cited unreported case bearing No. CA/613/92 (F) inwhich the principle of Diyes Singho v Herath (supra) had beenfollowed.
The decision in Diyes Singho v Herath (supra) is not applicableto the facts of this case. In that case the Supreme Court wasconsidering the question under section 7(1) of the Registration ofDocuments Ordinance, whether an unregistered instrument is voidas against a subsequent registered instrument and the questionwhether the later instrument has been duly registered as requiredby the Ordinance.
In terms of section 7(1) of the Registration of DocumentsOrdinance an instrument executed on or after the 1st day ofJanuary 1864 shall be void as against all parties claiming anadverse interest thereto on valuable consideration by virtue of anysubsequent instrument which is duly registered under Chapter III ofthe Registration of Documents Ordinance (emphasis added.)
Therefore to establish prior registration where there are 2competing deeds, under section 7(1) of the Registration ofDocuments Ordinance, it is mandatory for parties to establish thatthe instruments were executed for valuable consideration.
It was under the aforementioned circumstances that T.S.Fernando, J. held in Diyes Singho v Herath (supra) inter alia thatalthough no issue was raised by either party in respect of valuable
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consideration for the subsequent instrument, the absence of suchan issue could not have the effect of absolving the plaintiff fromproving that valuable consideration was given. Proof of theexistence of a statement in the deed by the notary thatconsideration was paid is not sufficient to establish the truth of thepayment of such consideration.
It is pertinent to observe that section 16 of the EvidenceOrdinance provides that where there is a question whether aparticular act was done, the existence of any course of businessaccording to which it would naturally have been done is a relevantfact.
Evidence of the existence of the course of business is relevantas laying foundation for the presumption which the court may raisefrom the course of business when proved. The Court may thenpresume that the common course of business, has been followedin the particular case.
This presumption is an application of the wider rule, Omniapreasummuntur rite essa acta, it proceeds on the recognised factthat the conduct of men in official and commercial matters is to avery great extent uniform and therefore, there is a strongpresumption that the general regularity will not in any particularinstance be departed from. (E.R.S.R. Coomaraswamy (1955)edition at page 80). A man is likely to do or not to do a thingaccording as he is in the habit of doing it or not doing it. (Wigmoresee 92)
It has been held in Tilakaratne v Samsudeenl4> that, if a deed ison the face of it regular, it will be presumed that all formalitiesrequired by law were complied with in its execution. It is interestingto note that Deed No, 8897(P1) is on the face of it regular. It ispresumed that all formalities required by law were complied with inits execution. Therefore, I am of the view that in the absence of anissue to the effect that the formalities required to be followed by lawwere not followed cannot be taken up as an issue for the first timein the arguments of the learned Counsel in this Court.
The learned District Judge has erred in applying the principle of“Laesio Enormis" on to this case and further he had erred in holdingthat the plaintiff-appellant has failed to identify the corpus.
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Par Marketers (Pvt) Ltd v Hatton National Bank Ltd
297
I set aside the judgment and decree of the learned DistrictJudge and direct him to enter judgment for the plaintiff-appellant asprayed for in the plaint.
The appeal of the plaintiff-appellant is allowed with costs fixed atRs.5000/-.
SOMAWANSA, J.Appeal allowed.
I agree.