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SUPRAMANIAN CHETTY v. GUNEWARDENE et al.
NLR3V278
SUPRAMANIAN CHETTY v. GUNEWARDENE et al.
D. C. Matara, 26,193.
Deed of gift-Fraud on creditors -Donor in possession of property gifted- Solvency of donor-Gifting away all property belonging to donor- Secret execution-Effect of registration as disproving secrecy -Evidence of conspiracy against creditors.
Neither a donation nor a sale would be considered fraudulent if the donor or vendor wore solvent at the time he made it; but the gift by a solvent person of the whole or of the bulk of his property made deliberately intending to contract debts with people who might believe him to be still the possessor of that property, and so to defraud them, should be held to be a fraudulent transaction.
The prompt and regular registration of a deed of gift is a circumstance which shows that the gift was not fraudulently made, inasmuch as it removes secrecy, which is the usual badge of fraud, and affords every opportunity for any party to ascertain that the property gifted by it has passed from the donor to the donee; and the fact of a donor remaining in possession with his children of a part of his property gifted by him to them, taking some of the nuts of the laud, does not prove that the family were living in a state of conspiracy against creditors.
THIS action was raised by the plaintiff to have a deed granted by one Pugita Gunewardene to the defendants set aside as a fraud on the creditors of the grantor. Plaintiff alleged that he obtained judgment against the grantor in suit No. 24,086; that he caused the Fiscal to seize a garden called Battalawatta as the property of his judgment-debtor; that the first second, and third
defendants, who are the sons of the grantor, and the fourth and fifth, who are the sons-in-law of the grantor, claim the land as theirs by virtue of the deed of gift above-mentioned. Plaintiff prayed that the deed may be set aside, and the land in question declared liable to be sold under his writ No. 24,086.
Defendants pleaded that their claim was good under the deed of gift and was not fraudulent. On the evidence led the District Judge found that the grantor was not heavily indebted, nor were all his properties gifted; that the debt in question was not incurred till nearly two years had elapsed since the date of the deed of gift and that though the donor was in possession of the land gifted, yet such possession was with the permission of the donees. He therefore dismissed the plaintiff's case.
Plaintiff appealed.
Cayley, Q. A., for appellant
Cur. adv. vult.
3rd December, 1872. Creasy, C.J., delivered the judgment of the Court as follows: -
The distinct and sole issue in this case was whether (as alleged in the words of the libel) " the deed of gift was a fraudulent one got up for the purpose of defrauding creditors." The pleadings did not raise the question whether at the time of the plaintiff's execution there was not other property of the donor's to which the plaintiff ought to have resorted before he levied on the land which was the subject of the gift. The affidavits now tendered by the plaintiff apply to this irrelevant question, and have only a very remote bearing on the question, whether the donor at the date of the gift several years before had any other property, which last-mentioned question might certainly affect the inquiry as to the donor's motives when he gifted away this particular land.
The date of the gift of this land is 8th December, 1866. One of the donees personally accepted it on behalf of all; on the 31st of the following month they all registered the deed of gift in the Registrar of Lands' Office for their district. This is a very important fact, and has weighed much with us in determining this case.
The plaintiff did not become a creditor of the donor until 14th November, 1867, when he lent him some money on a promissory note.
We entered very fully into the law as to donations in two judgments
