SIYATU v. BANDA

013-NLR-NLR-V-19-SIYATU-v.-BANDA.pdf


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Present: De Sampayo J.
SIYATU v. BANDA.
113—C. R. Gampola, 2,144.
Lease executed for defrauding creditor*—Action by lessor against lesseeto obtain declarationthatleaseteas void—Mag' lessor bringan
action to cancel deed if the illegal purpose is carried out fully orin parti—Prescription.
A executed, in 1901, a deed of lease of his land in favour of Bfor 99 years. B granted a sub-lease to C in 1912 for four years.A brought thisactionin1915 for adeclaration that boththe leases
were null andvoid, andalleged thathe executed the lease without
consideration infavourofB to defraud D, a creditor ofhis, who
lent hfm (A) Be. 500ona mortgageof the land in 1903,and that
he was all along in possession, in spite of the lease, till C disturbedhis possession in 1913.
Held, that the action was not barred by the Prescription Ordi-nance, 1871.
** The cause of action in such cases as ibis is not the executionof the deed, butanyacton thepartof one partycontravening
the original intention, mid interfering with the- rights of the other.”
Held, further, onthefacts, thatA hadnot executedthe leaseiir
favour of B for defrauding X), but that if there was any fraudulentjpte"* the fraudwasnotearnedout,as D hadsucceededin.
recovering his money.
fjlHE facts are set out in the judgment.
Bawa, K.G., for plaintiff, appellant.
Bartholomeusz, for defendants, respondents.
June IB, 1916. De Sampayo J.—
This is an action in which the plaintiff seeks to have two deedsdeclared null and void, and to be quieted in possession of certainlands. The first of thegse deeds is No. 5,951, dated March 25, 1901,by which the plaintiff leased his half share of the lands for 99 yearsto the first defendant and one Alweera Mudianselage Dingiri Bandaand the second of them is No. 2,868, dated July 27, 1912, by whichthe first defendant granted a sub-lease of his interest in the landsto the second defendant for a term of four years. The considerationfor the deed No. 5,951 is a sum of Bs. 500, acknowledged to havebeen received in advance as rent for the whole period. But the-plaintiff’s case is that there was, in fact, no consideration whatever,and that the deed was executed by him in order -to defraud his-
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1916.,
Da SamfatoJ.
Siyatu v.Banda
creditor, one Beale, conductor, 'who lent him Rs. 500 on a mortgageof the same lands on September 10, 1903. He says, and has calledwitnesses to prove, that he has been in possession of the lands allalong, notwithstanding the lease; and he further refers, as showingthe true character of the transaction, to the fact that the firstdefendant's co-lessee, Dingiri Banda, by deed No. 1,347, datedFebruary 5, 1912, assigned his interest to the plaintiff's daughterTilriri Menika, who in July following assigned the same to theplaintiff. One more fact that may be mentioned in this connectionis, that the second* defendant, on the strength of his sub-lease fromthe first defendant, attempted to disturb plaintiff's possession bycutting the crop of one of the fields in 1913, and was prosecutedfor criminal trespass and convicted. The plaintiff says that heonly then came to know of the sub-lease, and that it was the firstintimation to him that the first defendant intended to set up anyclaim on the basis of the old lease. That incident is the proximatecause of the .present action.
I may at "once dispose of the plea raised by the defendants thatthe plaintiff’s action is barred by limitation, inasmuch as morethan three years have elapsed since the date of the lease. Theaction no doubt comes under section 11 of the Ordinance No. 22 of1871, and the peripd of prescription is three years from the time ofthe accrual of the cause of action. But the cause of action in suchcases as this is not the execution of the deed, but some act on thepart of one party contravening the original intention and interfering■with the rights of the. other: Senaratne v. Jane- Nona,.1 Conse-quently the plaintiff’s action, so far as prescription is concerned,may be maintained.
The real questions in this case are whether the deed of lease was■executed without consideration and. for the purpose of defraudingBeale, and if so, whether the intended fraud was carried out so. asto disentitle the plaintiff to any relief against the first defendant.The Commissioner expresses himself as unable to accept the plaintiff’sword that no consideration passed, and X ‘do not think the circum-stances justify a contrary opinion. It is true that the payment in.-advance of such a large sum as Rs. 500 on a lease is not usual amongvillagers, but the lease for 99 years was practically a sale, and itis shown that at this time the plaintiff was pressed for money in•order to pay off two mortgages. Moreover, the other lessee, DingiriBanda, was not called, to support the plaintiff’s account of thematter; and Dingiri Banda’s, assignment to plaintiff’s daughterappears on the face of the deed to have been for the considerationof Rs. 299.20, though plaintiff says that he only paid him Rs. 50as a santosiim or present and that the assignment itself was without(Consideration. This assignment is significant, because the creditorBeale had long before that been paid, and there was no object
i(191S) 16 N. L. R. 389.
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whatever in stating in the assignment any but the true facts ifthe original lease had been a mere colourable transaction. Theplaintiff even more signally failed to prove that the intention oftimMtf and his lessees was to defraud Beale. The Commissionerhas rightly compared the respective dates of the lease and Beale'smortgage. The former was in March, 1901, and the latter two anda half years after it, and it is hardly possible, under ordinary circum-stances, to conclude that one was executed to defeat the other.The plaintiff, being confronted with this difficulty, tried to avoidit by vaguely suggesting that at the time of the execution of thelease he had begun negotiations with Beale: about borrowing moneyfrom him, but it is obvious that he was not speaking the truth. Inmy opinion the Commissioner is right in holding on the materialsbefore him that the lease was not executed to defeat any creditor.
It being thus found that no fraud existed, it is, of course, unneces-sary to decide the further point, whether, in the circumstances ofthis case, the alleged fraud can be said to have been carried out.But as the affirmative was strenuously maintained by counsel forthe defendant, I may here say a word about it. The law is thatwhere the intended fraud is not accomplished, the maxim in paridelicto potior est conditio defendentis has no application, and theparty who has delivered the property may lawfully reclaim itbefore the alleged purpose is carried out. See Mohamadu Marikarv: Ibrahim Naina1 -and the authorities therein cited. The factsin this case touching this matter may be shortly stated. Beale,on discovering the existence of the lease, prosecuted the plaintifffor cheating in 1905. The plaintiff was tried in the District Courton that charge, and in the course of the trial thought better of hissituation and came to a settlement with Beale. He got bis'brother to pay B.eale and withdrew his defence, and pleaded guiltyto the charge, and the Court imposed* a very light punishment.Thus, Beale was not, after all, deprived of his money, though theprosecution was undoubtedly the means by 'which that result wasproduced. Now, the statement of the proposition of law abovegiven does not appear to be quite complete. The case of Kearleyv. Thomson shows that, it is not necessary that the illegal purposeshould be fully accomplished, and it is sufficient if a material partof it is carried out. Thus, where a person was upon convictionrequired to find security for good behaviour and gave money tohis surety to be deposited, it was held that the illegal purpose wassufficiently complete when the deposit was made and the securityexecuted, and that he could not recover the money by repudiatingthe transaction before the security was forfeited. Herman v.Jeuchner.* To apply this principle to the facts of the present case,was the fact of Beale being driven to take criminal proceedings
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Db SampavoJ.
Siyaiuv.Banda
* (1910) 13 N. L. R. 187.a (1890) 24 Q. B. D. 742.
* (1885) 15 Q. B. D. 561.
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J.
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the carrying out. of a material part of the fraud? And was thesettlement with Beale through plaintiff’s brother, in order to escapecondign punishment, an exercise of the locus penitentite before thecarrying out of the intended fraud? These questions should, itwould seem, be answered in the negative. In Petherpeptmal Chettyv. Muniandy Servai,1 where a conveyance had beecf executed to-defeat an equitable mortgage, and the equitable mortgagee broughtan action impeaching the transaction and claiming priority, theCourt so declared and ordered payment, and thereupon the mort-gagor procured money by a fresh loan and paid off the mortgage.In reference to a similar argument as in the present case, the PrivyCouncil there observed that whatever might have bean the originaldesign; the creditor was not, in fact, defrauded of? his debt. For“ he was paid his debt, together with the costs of the litigation,which he successfully prosecuted, and if his interests'were prejudicedat all, it was only to the extent that he was obliged to take proceed-ings which, had the deed never been executed, hie might possiblynever have been obliged to take. ’ ’ According to this, Beale, cannotbe said to have been defrauded, for he was fulljl > satisfied, exceptperhaps as regards any expense he might, have incurred in connectionwith the criminal prosecution. It may, therefore! :be held, that, ifthere was any fraudulent intent involved in the need of lease, thefraud was not carried out, but this does not help the plaintiff,because, as I have said, I agree with the Commissioner that, hefailed to prove that the lease was executed for any illegal purpose.
The plaintiff says he has been in possession since the date of thelease, and his counsel is apprehensive that he may hereafter beunable to depend on prescriptive title as against the defendants.I do not think the judgment in this case will have such an effect;but for greater caution it may be declared that the dismissal of thisaction will be without prejudice to any right founded on possession.The appekl is dismissed, with costs.
Appeal dismissed ..
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. t (1908) I..L. H. 35 Cal. 551..