A party cannot rely on a transaction intended to defraud creditors, even if the fraud did not result in actual loss to the creditors.

Coutts-Trotter, C.J.

1. I am very dissatisfied with the findings arrived at by the learned District Judge, but I see no option but to take his findings as they are. The suit was brought by two persons who were not at the time of this suit in possession. They, therefore, could not merely rely upon their possessory title and say: "We are in possession. These people must be ejected and they must go." They had not been in possession from a very long time and, therefore, they could only eject the defendants by showing that they had some sort of what I may conveniently call a paper title. In order to do that, they had ultimately to rely on Ex. A. That was a sale of house and lands and the plaintiffs case was that although the sale of the lands was a genuine enough transaction, the sale of the house was benami. If the matter had stood there all might have been well. But the parties raised a further question on which the learned Judge has given a finding. His finding is that the sale was taken benami to screen the property from creditors. It is quite obvious that those who claim under a document cannot succeed if it is necessary to their case to show that the facts surrounding it were such as to make it a fraud on creditors. The learned Judge in paragraph 17 of his judgment confuses himself on this point; but so far as I can make him out-it is not a very clear judgment-he says that this case does not come within the mischief of that rule because there is nothing on record to show that any creditors were defrauded so as to bring the plaintiffs within the bar. As I understand the law a party cannot set up his own fraud whether it proved fruitful or not and if he entered into a transaction, the object of which was to defraud his creditors, he is debarred from relying upon that transaction and setting up his own fraud whether the fraud did in fact prove infructuous or not. In my opinion the learned Judge has entirely misapplied his mind to the real question in the case, and his first finding is conclusive against the plaintiffs.

2. I should like to point out that as at present advised I see no justification for the words that have got into the head-note of the case of Kamayya v. Mamayya [1918] 32 M.L.J. 484 in which the late Chief Justice, Sir John Wallis, and myself gave. judgment. The words introduced are "where the fraud introduced has been effected." If that means merely that the fraudulent thing has been done, namely, the execution of a document with the intention to defraud creditors, I have no further criticism to make but if it means that the fraud mast not only have been carried out in the sense of the transaction entered into with the parties but that the fraud must have de facto resulted in defeating the creditors rights and causing loss to them. I am of opinion that that head note is not warranted by that decision.

3. The appeal must be allowed with costs throughout.