Hall V. Pelmadulla Valley Tea And Rubber Co., Ltd.,

1927 Present: Fisher C. J. and Garvin J.

HALL v. PELMADULLA VALLEY TEA AND RUBBER CO., LTD., et al.

326-D. C. Ratnapura, 4,107.

Contract-Agreement to transfer land-Registration-Sale to plaintiff- Notice-Tenses Ordinance, No. 9 of 1917, s. 93.

By a notarial contract, the added defendant, after reciting that lie had agreed to sell 1,000 acres of land to the defendant company, bound himself to give effect to that agreement and to deduct a good and valid title.

In pursuance of the agreement the company was placed in possession of certain blocks of land which form the subject- matter of the present action.

The plaintiff, with notice of the said agreement  purchased  the land and sought to eject the company therefrom.

Held, that the contract was an existing enforceable contract within the meaning of section 93 of the Trusts Ordinance and that the plaintiff was bound to hold the property for the benefit of the company to the extent necessary to give effect to the contract.

The proviso to section 93 of the Trusts Ordinance does not prevent the application of the section to contracts affecting immovable property, which are not required by law to be registered.

THIS was an action instituted by the plaintiff for declaration  of title to certain blocks of land and for ejectment of the defendant company. The added defendant had planed the company in possession of the land in pursuance of. an agreement entered into between him and the company, by which he undertook to sell to the latter 1,000 acres of land in the vicinity of Rilhena estate belonging to the company. In breach of the said agreement the added defendant transferred the land to the plaintiff. The defendant company contended that the transfer to plaintiff was void and asked for la declaration, ordering the added defendant to execute a conveyance in their favour. The learned District Judge gave judgment for the defendant company.

Keuneman (with Ferdinands), for plaintiff, appellant.-The defendant company cannot rely on section 93 of the Trusts Ordinance because they have not registered the agreement to transfer the 1,000 across. The document became registerable once the lands were ascertained. The company should have had a supplementary deed drawn up, giving the description of the lands, when ascertained, and registered that deed.

The agreement is not one of which specific performance can be enforced as it is indefinite. There is ho definite corpus described, in it in respect of which the remedy can be granted.

Further, as it provides for payment of damages in the event of a breach, the Court will not decree specific performance. The company never at any time made a proper tender of the purchase price or of a draft conveyance. The company had committed a breach of the agreement and was not entitled to claim specific performance.

Hayley (with Bartholomeusz and Choksy), for defendant, respondent. The company is entitled to claim the land from the plaintiff under section 98 of the Trusts Ordinance. The proviso requiring registration cannot defeat the company's claim because the document was not registerable. The proviso can only apply to a case where a document is in fact registerable but has not been registered. It was so held by the Privy Council in White v. Neaylon. 1 Counsel cited In re Calcott and Elvins Contract (1898), 2 Ch. 460; 13 Hals-bury, pages 86 (f), 87.

A purchaser, who finds a third party in possession, must make inquiry as to his rights otherwise he is bound by the equities between the party in possession and the vendor. If he does not do so, he is deemed to have notice of the rights and equities of the party in possession. Daniel v. Davidson,2 Hunt v. Luck,3 Barnhart v. Grecnshields.4

On the question of specific performance, it is submitted that the uncertainty created by the absence of any description of the company in the agreement to sell can be

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