1933 Present: Dalton A.C.J. and Drieberg J.

EMEE NONA v. WINSON.

106-D. C. Galle, 30,100

Constructive trust-Fraudulent purchase by decree-holder of property in defendant's name-Evasion of Court's order-Action by administratrix of decree-holder for declaration of trust-Trusts Ordinance, No. 9 of 1917, s.83.

Where the plaintiffs intestate, the holder of a mortgage decree fraudulently purchased the mortgaged property below the appraised value in evasion of the order of Court, and the conveyance was executed in the name of the defendant,-

Held (in an action for a declaration that the defendant held the property in trust for the plaintiffs intestate), that the plaintiff was not entitled to prove a constructive trust.

APPEAL from a judgment of the District Judge of Galle.

N. E. Weerasooria (with him D. E. Wijeywardene and U. J. T. de Silva). for defendant, appellant.

H. V. Perera (with him M. C. Abeyewardene), for plaintiff, respondent.

July 18, 1933. DALTON A.C.J.-

The plaintiff, as administratrix of the estate of her late husband Endoris Appu, sought to obtain a declaration of the Court that certain premises purchased in the name of the defendant were bought in trust for Endoris Appu.

The defendant, son-in-law of Endoris Appu, pleaded that at the date of his marriage to the daughter of Endoris Appu, the latter had promised to provide him and his wife with a house, and that in fulfilment of that promise Endoris had purchased the premises in question and conveyed them to defendant as an absolute gift to him and through him to his daughter.

The property was purchased at a judicial sale in execution on December 8, 1923, and thereafter an auctioneer's conveyance No. 549 of February 5, 1924, was made out in the name of the defendant. It is admitted by defendant that Endoris paid the consideration for the deed.

The parties went to trial on two issues only:-

1. Did Endoris pay the consideration on deed 549 for the benefit of the defendant or for himself ?

2. Is the action prescribed ?

The learned trial Judge has answered both issues in favour of the plaintiff, and came to the conclusion that Endoris paid the consideration on the deed for his own benefit. In the course of the trial, however, plaintiff gave a full and frank account of the circumstances under which the purchase was made.

Endoris was a wealthy man, a jeweller who had made money in Africa. At the time of his death he had money out on 120 mortgages, and he owned nineteen different immovable properties. He had lent money on

a bond (No. 250 of 1919) to one Mohamed Haniffa, the premises in question being mortgaged. This bond was put in suit in case D. C. Galle, 20,829, instituted on August 17, 1923, to recover Rs. 17,301 principal, and Rs. 6,797 or thereabouts as interest. Judgment was obtained, defendant Haniffa consenting to judgment for the amount claimed. The plaintiff Endoris then moved for leave to bid at the sale, and to purchase the property in reduction of his claim. Leave was granted, but on condition that plaintiff should not be allowed to purchase for less than the appraised value, which was Rs. 14,000.

The sale was held on December 8. There is no evidence to show that defendant was present or consented at that date to his name being used, or had anything to do with the sale. To get round the order of the Court, Endoris got the witness Wijesekere to bid for him. Wijesekere, a witness for the plaintiff in this case, says Endoris asked him to buy for him (Endoris) in his (Wijesekere's) name " because he wanted to buy for less than the appraised value". Wijesekere says he suggested the name of defendant his son-in-law, as his sons were minors at the time. This suggestion was adopted, for Wijesekere then made a bid for Rs. 5,000, and he received a receipt for one-tenth of the purchase price and charges (P 3), which was made out in defendant's name. The sale to defendant was thereafter