Valliyammai Atchi V. Abdul Majeed

[IN THE PRIVY COUNCIL]

1947 Present: Lord Thankerton, Lord Uthwatt , Lord Du
Sir Madhavan Nair and Sir John Beaumont.

VALLIYAMMAI ATCHI, Appellant, and ABDUL MAJEED,
Respondent.

PRIVY COUNCIL APPEAL NO. 15 OF 1946.

S. C. 30-D. C. Colombo, 1,961.

Trust-Unconditional notarial transfer of land-Parol agreement of trust- Admissibility of oral evidence-Whether Section 2 of Statute of Frauds applicable-Formalities necessary to constitute trust-Section 5 of Trusts Ordinance-Effectuating fraud-Evidence Ordinance, sections 91 and 92.

M who was entitled inter alia to certain immovable property of the value of over Rs. 460,000 executed an unconditional notarial transfer of these properties to N for a consideration of Rs. 203,256. It was alleged by M that this transfer was in pursuance of a verbal agreement that N was inter alia to hold the properties in trust for him; to pay out of the income certain specified debts and interest to himself at 13 per cent. on the said sum of Rs. 203,256 and to reconvey the properties to M on the liquidation of the said sum of Rs, 203,256 and interest. N died and his widow claimed to hold the properties free of the trust. In an action by M for a declaration of trust and consequential relief-
 
Held, that oral evidence was admissible to establish the trust.

Held, further, that the formalities required to constitute a valid trust relating to land are to be found in section 5 of the Trusts Ordinance and not in section 2 of the Prevention of Frauds Ordinance ; that the act of the widow in seeking to ignore the trust and to retain the property for the estate was to effectuate a fraud ; that, therefore, under section 5 (3) of the Trusts Ordinance even a writing was unnecessary and sections 91 and 92 of the Evidence Ordinance had no application.

APPEAL from a judgment of the Supreme Court reported in (1944) 45 N. L. R. 169.

D. N. Pritt.. K.C., with Stephen Chapman, for the appellant,

C. S  Rewcastle, K.C., with R. K. Handoo, for the respondent.

April 24, 1947. [Delivered by SIR JOHN BEAUMONT]-

This is an appeal from a Judgment and Decree of the Supreme Court of the Island of Ceylon dated March 31, 1944, affirming a judgment and decree of the District Court of Colombo dated September 25, 1942. The suit out of which this appeal arises was brought by one O- L. M. Abdul Majeed (hereinafter called "the plaintiff") against the appellant as executrix of the estate of her late husband, K. M. N. S. P. Natchiappa Chetty (hereinafter called " Natchiappa"). The plaintiff died after the hearing of the appeal in the Supreme Court, and by Order of Revivor made on June 4, 1946, the respondent was brought on record as the executor of his estate.
By the plaint filed on November 4, 1940, the plaintiff alleged (Paragraph 4) that he was entitled (a) to movable property of the value

of Rs. 250,000; (b) to a large number of immovable properties specifically described of the value of over Rs. 460,000; (c) to other immovable property of the value of Rs. 200,000. Paragraph 5 specified the debts for which he was liable at that date. In paragraph 7 it was alleged that in February, 1930s it was agreed between the plaintiff and Natchiappa, by his agent and attorney Ramanathan Chetty:-(a) that the plaintiff should execute a transfer of the properties referred to in paragraph 4 (b) in favour of Natchiappa; (b) that the deed of transfer should purport to be for a consideration of Rs. 203,300; (c) that Natchiappa should hold the said properties in trust for the plaintiff and should collect the rents, profits and income thereof as trustee of and for and on behalf of the plaintiff ; (d) that the sum so collected should be devoted by Natchiappa to pay the rates and taxes then due as therein mentioned a secured debt of Rs. 1,516 due to a third party, to the payment of rates and taxes and expenses in connection with the repairs of the properties, and t

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