1944 Present: Hearne, Keuneman and Jayetileke JJ.

JONGA et al. Appellants, and NANDUWA et al, Respondents.

9-C. R. Gampaha, 1,385.

Sale-Reservation of right to repurchase-Condition binding on the vendee- Trusts Ordinance (Cap. 72). ss. 88 and 96.

Where a deed of sale reserves a right of repurchase to the vendor, within a ' certain period, the condition with regard to repurchase is binding on the vendee, although he has not signed the deed.

THIS case was referred to a Bench of three Judges by Soertsz J.

The facts appear from the argument.

H. V. Perera, K.C. (with him H. A. Koattegoda and C. C. Rasa Ratnam), for the defendants, appellants.-The first plaintiff transferred, by P 2 of July 15, 1935, a land to the defendants with the right reserved to repurchase " (or redeem) " the property within 8 years on payment of s. certain sum of money. Thereafter the first plaintiff purported, by P 1 of July 11, 1942, to assign to the second plaintiff the right which was reserved to him. The first and second plaintiffs now come to Court within the 8 years and ask for the reconveyance of the property. The question is whether, having regard to the fact that P 2 was signed by the plaintiff alone and not by the defendants, the reservation of the. right to repurchase can be enforced in law, in view of the provisions of section 2 of the Prevention of Frauds Ordinance (Cap. 57).

In P 2 the entire dominium over the land was transferred to the defendants, and no real right was retained. The first plaintiff reserved only a personal right and not any real right. For the difference between a real right and a personal right see Wille's Principles of S. African Law (1937 ed.). p. 47. In order to sue the defendants for a personal right relating to immovable property it is necessary that P 2 should have been signed\by them. English principles of equity cannot help the plaintiff in view of the drastic nature of our section 2 of Cap. 57-Arsecularatne v. Perera [1 (1926) 28N N.L.R. 1 at 13.], a case which was taken to the Privy Council [2 (1927) 29 N.L.R. 342 at 345]. English principles were not correctly applied in Sardiya v.'-Ranasinghe Hamine [3 (1939) 41 N.L.R. 233.] and Babun Singho v. Semaneris Singho [4 (1940) 16 C. L. W. 83.].

[KEUNEMAN J. referred to section 96, illustration (c) of the Trusts Ordinance (Cap. 72)].

This is not a case where the transferee can be regarded as a trustee. Section 3 (a) of the Trusts Ordinance defines the term " trust ". No questions of beneficial ownership and equitable rights arise in the present case.

[ KEUNEMAN J.-Can you not read a mortgage into deed P 2 ?]

The language of the document negatives the existence of a mortgage. It cannot be said that there was any security furnished, because security presupposes the continuing existence of a debt. Further, the dominium in the property passed to the defendants.

N. Nadarajah, K.C. (with him K. Herat), for the plaintiffs, respondents.- Where property is sold subject to a condition the condition can be enforced. The condition cannot be separated from the grant. Prevention of Frauds Ordinance cannot be used to cover what would amount to a fraud. The plaintiffs are entitled to claim a reconveyance of their property. See Gould v. Innasitamby [1 (1904) 9 N.L.R. 177.] Issam. Appu v. Gura [( 1910) 13 N.L.R. 104] Guruhamy v. Subaseris et al.[3 (1910) 13 N.L.R. 112]; Nanayakkara et al. v. Andris et al.[4 (1921) 23 N.L.R 193] In re Duke of Marlborough [5 L.R. (1894) 2 Ch.133] Babun Singho r. Semaneris Singho (supra); Sardiya v. Ranasinghe Hamine (supra).

In P 2 full ownership was not granted. There was a diminution imposed by the condition. The transaction imposed upon the defendants duties and obligations in the nature of a trust Saminathan Chetty v. Vander. Poorten [6 (1932) 34 N.L.R. 287 at 294 et. seq.]. Sections 92 and 96 of the Trusts Ordinance are applicable. It is the substance of the transaction