Carthelis Appuhamy V. Saiya Nona Et Al.,

1945 Present: Soertsz A.C.J. and Keuneman S.P.J.

CARTHELIS APPUHAMY, Appellant, and SAIYA NONA et al.,
Respondents.

17-D.C. Kurunegala, 1,348

Trust-Sale of land by notarial deed-Transferee's informal writing on same day promising to reconvey-Validity of-Absence of circumstances-creating constructive trust.

By a notarial deed (P3) of April 30, 1941, plaintiffs conveyed certain lands to the defendant. On the same day, in consequence of a prior oral agreement, a non-notarial document (P4) was signed by the defendant by which he agreed to retransfer the said lands on payment by plaintiff,-within a certain period, of a sum equal to the consideration paid by the defendant on deed P3.

The deed P3 on the face of it conveyed the full interest of the owners, without the reservation of any condition or equitable right, and the defendant was thereafter placed in possession of the lands. There was no evidence of any gross disparity between the value of the lands at the time and the price paid under P3, or of any other circumstance which might tend to show that the transfer was to be in trust.

Held, (in an action for the enforcement of the condition to retransfer) that the writing P4 was of no force or avail at law as it was not contained in a notarial document.

Held, further, that there were no circumstances which could bring the case within the sections of the Trust Ordinance relating to constructive trusts.

Carthelis v. Perera (1930) 32 N. L. R. 19 and Jonga v. Nanduwa (1944) 45 N. L. R. 128, distinguished.

APPEAL from a judgment of the District Judge of Kurunegala.. The plaintiffs mortgaged certain lands to Ramanathan Chettiar who put the bond in suit, obtained judgment and was about to cause the lands to be sold. The plaintiffs then approached the first defendant, a distant relation, and asked him to pay the Chetty's claim, promising (in the word of one of the plaintiffs) " to transfer the property to him to be held on trust for us. We agreed to transfer the lands to the first defendant on condition that he would retransfer the lands to us within four years " on payment of the amount paid to the Chetty. As a result of this documents P3 and P4 were made in circumstances set out in the head note. The plaintiffs sued for the enforcement of the condition to re transfer. The learned District Judge held that a trust had been established and entered judgment for the plaintiffs.

H. V. Perera, K.C. (with him S. W. Jayasuria), for first defendant appellant-By a notarial deed, P3, the owners conveyed the land in dispute to the first defendant. On the same day by a non-notarial document the first defendant promised to retransfer the land to the owners. The District Judge held that the transaction created a trust. It is submitted that no trust was created. The question is whether the person who gets title is getting the whole of the dominium. Here the-

whole beneficial ownership was given over by P3. There is nothing but a sale with a subsequent agreement to retransfer. The agreement to retransfer, being informal, cannot be enforced. Carthelis v. Perera 1 is distinguishable as that was a case concerning a gift. Jonga v. Nanduwa 2 is inapplicable because there the notarial deed of transfer itself contained -a condition giving a right to redeem on repayment of the consideration.

N. E. Weerasooria, K.C. (with him C. E. A. Samarakody), for plaintiffs, respondents-The transfer was an arrangement to pay a debt to a Chetty. There was no sale outright. The transferee was merely expected to hold the property in his name. Possession was given on that basis, not on the basis of vendee. If these facts were proved the trial Judge was right in his conclusion. Where a person enters into' possession on the basis of a certain arrangement he cannot say that possession was given on the basis of a contract of sale-Valliyammai Atchi v. 0. L. M. Abdul Majeed 3; Rana

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