Costa Et Al. V. Silva Et Al.,

[PRIVY COUNCIL. ]

1917 Present: Lord Buckmaster, Lord Dunedin, Lord, Parmoor,
and Sir Walter Phillimore, Bart.

COSTA et al. v. SILVA et al.

D .C. Colombo, 35,701.

Executor purchasing property of testator in the name of his son-Sale set aside.

Where an executor being anxious to buy the estate of his testator bought it for himself in the name of his son, the sale was set aside.

THE facts are set out in the judgment.

February 19, 1917. Delivered by LOAD BUCKMASTER: -

Two questions are involved in this appeal: the one as to whether the appellants are entitled to set aside a deed of conveyance, No. 5,118, dated June 14, 1902; and the other, which only arises if the first be affirmatively answered, what form the order granting such relief should assume. Neither question involves any intricate considerations of law, nor are the material facts capable of serious dispute.

The appellants are the five children of Philippa Moraes, and are together entitled in possession to one-fourth share of certain real estate, which was. the subject of a general gift contained in the joint will of one Simon Moraes and his wife, Justina Pereira. This real estate, in turn, consisted of certain fractional interests in five different properties acquired by Simon Moraes at various dates between 1874 and 1885. The joint will was dated July 7, 1894; by it the first and second respondents were appointed executors, and under its terms the appellants became entitled to half of a half of these fractional interests in reversion expectant on the death of their mother, Philippa Moraes.

Simon Moraes died on December 23, 1897; his wife survived him, and died on July 28, 1908; and Philippa Moraes died on February 18, 1907.

It is uncontradicted upon the evidence that in 1902 the second respondent was anxious to buy the property in question for himself; there is no reason to impute to him improper or dishonest motives for this desire. He was associated with the family, and there may have been many good and fair reasons which prompted his wish. He accordingly inquired of Mr. E. W. Pereira, a proctor of the Supreme Court, as to whether his proposal could be properly accepted, and was clearly told that it could not. The direct

transfer to himself was therefore abandoned, but on June 14, 1902, the conveyance in dispute was executed, transferring the whole of the interests in the real property in question to his son, the third respondent to this appeal, for the price of Rs. 5,500. No purchase money was provided by the son on this transaction, the whole amount being raised by a mortgage of the purchased estate and of certain other property belonging to the second respondent, by whom this mortgage was subsequently redeemed.

In 1909 the appellants commenced proceedings under the testamentary jurisdiction of the District Court of Colombo, and, as they alleged that the sale in question had been made at an under-value, an issue was directed to ascertain the facts.

This issue was tried with witnesses, and on January 11, 1912, the District Judge held that the allegation as to under-value had been established, and that the executor was himself the real purchaser of the estate. The third respondent, the son of the executor, was no party to these proceedings, and, as the property stood in his name, separate proceedings were necessary to set aside the deed.

The action out of which this appeal has arisen was accordingly begun on January 27, 1913.

Between the date of the judgment of the District Judge and the commencement of this suit, namely, on December 14, 1912, the second and third respondents executed a mortgage of the property to the fourth and fifth respondents, who were consequently made defendants; but as a caveat had been registered against the title on November 23, 1912, their position does not differ from that of their mortgagors. The case was heard before the District Judge, wh

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