PODISINGHO APPUHAMY v. LOKUSINGHO et al.

PODISINGHO APPUHAMY v. LOKUSINGHO et al.

D. C, Negombo, 3,294.

Prescription-Actio Pauliana-Accruing of cause of action-Ordinance No. 22 of 1871, s. 11.

No action of a creditor, claiming a declaration that the deed of transfer made by his debtor in favour of the defendants be declared fraudulent and void, can be maintained, unless the same be commenced within three years of the accruing of the cause of action.

In such a case, the cause of action arises when it becomes clear that the effect of the deed will be to defraud creditors. It does not necessarily arise at the time of the execution of the deed.

It arises after all the rest of the property of the debtor not included in the impeached deed has been exhausted by executors, when it becomes quite certain that unless the deed is set aside there will not be the means of satisfying the debts.

THE facts of this case are as follows:--The plaintiff instituted an action No. 2,385 in the Court of Requests of Negombo in July, 1894, against one Migotehihamy, the mother of the first, second, and fourth defendants, for the recovery of a certain sum

of money alleged to be due on a promissory note, and obtained judgment on the 9th May, 1895. He then caused the Fiscal to sieze and sell Migotchihamy's interest in two lands, and himself became the purchaser thereof on the 29th August, 1895. He obtained a conveyance from the Fiscal on the 30th November following. During the pendency of the action No. 2,885, Migotchihamy conveyed her interest in the two lands subsequently purchased by the plaintiff to the first, second, and fourth defendants, by deed dated 31st January, 1895. In regard to this deed plaintiff alleged that there was no consideration, and that it was executed by Migotchihamy in collusion with the first, second, and fourth defendants with the view of preventing the plaintiff from recovering the debt due by Migotchihamy. He prayed that the deed be declared fraudulent and void in respect of the lands purchased by him at the Fiscal's sale on the 29th August, 1895.

The present action was filed on 30th November, 1898. The issues settled by Court were these:-

First,-Was the deed of 31st January, 1895, executed in fraud of creditors ?

Second,-Is plaintiff's action barred by prescription under section 11 of Ordinance No. 22 of 1871?

As regards the first issue, the District Judge held that the deed was executed in fraud of plaintiff.

And as regards the second issue, he held as follows:-" The action " does not fall under any of the heads mentioned in the sections " preceding section 11 of the Ordinance No. 22 of 1871, and should " have commenced within three years as laid down in section 11 " from the time the cause of action accrued. Defendant's counsel " urged that the cause of action accrued on the 9th May, 1895, " the date of the decree in case No. 2,385, for at that time plaintiff " was aware of the execution of the impeached deed by his debtor, " and not on the 29th August, 1895, the date of the sale by the " Fiscal of the lands in question. With this contention I am " unable to agree. Plaintiff could not claim to be entitled to " those lands till after he had obtained the Fiscal's transfer. It " was only after ho had obtained the transfer and had been " prevented by the defendants from taking possession of them that " his cause of action accrued. The present action was instituted " on the 30th November, 1858. The Fiscal's transfer is dated 30th " November, 1895. I hold that the action is not prescribed."

He therefore entered decree for plaintiff.

Defendants appealed.

Wendt, Acting A.-G., for appellant.-The cause of action arises as soon as creditor discovers, that he was injured (Voet ad Pand, XLII. 8, 13). Plaintiff says that the impeached deed of conveyance comprises all the property of the judgment-debtor, and that be knew of the alienation. The reckoning of the date should commence from the date of

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