IBRAHIM SAIBO and ANOTHER v. THE ORIENTAL BANK CORPORATION.

IBRAHIM SAIBO and ANOTHER v. THE ORIENTAL

BANK CORPORATION.

D. C, Colombo, 60,617.

 

Fraud-Implied trusts-Resulting and constructive, trusts-English Law- Roman-Dutch Law-Deed secured by debtor, in name of third parties, in fraud of creditors-Ordinance No. 7 of 1840--Parol evidence, to prove fraud.

Where the price for the purchase of certain lands was paid by one A, but the names of the plaintiffs were fraudulently entered in the conveyances as purchasers and as having paid the consideration, for the purpose of concealing the true ownership from A's creditors; and where the purchases were intended to be for A's benefit, and to withdraw from his creditors the purchase money and certain other large sums of money which he disbursed on the improvement of the lands and in erecting buildings on them; and where there was a secret understanding between A and plaintiffs that the latter should formally convey the lands to the former after he should compound with his creditors, and that in the meantime A should possess the lands as his own from the date of the conveyances to plaintiffs and with their knowledge and assent; and where at the date of the conveyances A was and ever since has been in insolvent circumstances, and where plaintiffs were parties to his fraud on his creditors-

Held, that the plaintiffs were not entitled to a declaration of title to these lands, nor to have them released from seizure under a writ sued out by defendants as creditors of A,

Per Berwick, D.J.-English trusts are the offspring of the Roman Law, enlarged and developed from the Roman fidei commissa, which were only testamentary, so as to embrace trusts created by parties inter vivos, and ultimately trusts created by implication of law, which are analogous to obligations arising quasi ex contractu.

Though in the Roman-Dutch Law there are no technical terms corresponding to implied or resulting or constructive trusts, owing to the system of administration of law and equity being such that there was no occasion for such terms, yet the doctrine of implied trusts is in substance part of that law.

To establish such trusts parol evidence may be admitted without violating the Ordinance of Frauds.

Where a transaction is intended to effect a fraud, parol evidence is at all times admissible to establish and create a resulting or constructive trust.

THE facts of the case and the propositions of law applicable to them are fully stated in the following judgment (dated 9th October, 1873) of Berwick, D.J.: -

This is an action to set aside a seizure of certain lands and goods on a writ of execution issued by the judgment-creditors of one Abbas, and to have plaintiffs declared the owners thereof. The lands are claimed by the plaintiffs in virtue of various purchase deeds in their names from third parties. They are claimed by the creditors as the property of their debtor.

On the facts, I find with respect to lands I. and III. In the libel that the purchase money was paid by Abbas; that the names of the plaintiffs were fraudulently entered in the conveyances as purchasers and as having paid the consideration, for the purpose of concealing the true ownership from Abbas' creditors; that the purchases were intended to be for Abbas' benefit, and intended to withdraw from his creditors the purchase money and certain other large sums of money which he disbursed on their improvement and in erecting buildings on them; that there was a secret understanding between him and plaintiffs that the latter should formally convey them to him after he should compound with his creditors, and that in the meantime he (Abbas) should possess the property and deal with it as his own; that he accordingly entered into possession and dealt with it as his own from the date of the conveyances to plaintiffs and with their knowledge and assent,

I also find that at the date of the purchases h

Click Here to Read the rest of this document