(COURT OF APPEAL)

BAKHEITA YOUSJF HASSAN v. BURRIE MOHAMED DAFALLA

AC-RE V-409-1966 

Principles

  Equity—Resulting trust—House belonging to family registered in name of one son but built by joint efforts—Rebuttable presumption of a resulting trust arises Land Law—Rectification of registration by court—Land Settlement and Registration Ordinance, s. 25—Applicable as proper provision of existence of a resulting trust in respect of registered land Reception—English principle of implied trusts allowed in Sudan on grounds of equity and justice

The principle of implied trusts is a general principle of equity, and it is reasonable and fair, and it is not declared by the Land Settlement and Registration Ordinance nor by any other enactment in force in the Sudan to be inapplicable, but rather allowed. Therefore, it has to be applied in the Sudan in appropriate cases.
In this case where the house in dispute belonged to a family but registered in the name of one son to enable him to obtain a building loan and it was built by the joint efforts of the son and father, the son becomes proprietor of the house without valuable consideration and the intention is that he holds for and on behalf of the family including himself who have beneficial interest in the house. Here arises a presumption of a resulting trust under the Land Settlement and Registration Ordinance, s. 25.

Judgment

Advocates: Abdel Rahman Yousif…………………. for applicant

Henery Riad……………………………………….. for respondent

Osman El Tayeb J. May 1I, 1968: —This is a case of a family dispute about the house known as plot No. 4/4/1398 Omdurman Town comprising 498 sq.ms. registered as freehold in the name of respondent—defendant. The plaintiffs are the parents of defendant, they claimed that they were the original owners of the said house, and that they permitted its registration in the name of defendant when it was a vacant plot, and

                      When it was built it be retransferred to them, according to an agreement to that effect. The house was built, and they instituted their suit in 1961 claiming an order of retransfer by rectification of the register in their names.

The history of the plot is as follows: There was a house known as plot No. 4/4/110 of Omdurman Town, comprising 2060 sq.ms. registered in the name of Heirs of Hassan Hussein. The area in which this house was situated was subject in 1952 to a replanning scheme, under which this house was converted to an open square. The scheme provided for giving compensation to the owners, including money for the buildings and other plots in Banat area. Yousif Hassan Hussein, since deceased, as one of the heirs was entitled to 360 sq.ms; he was to be awarded a plot of land in the newly-planned area of Banat, in addition the sum of £S.203.000m/ms. for the buildings that were in the area owned by him.

It happened that the family in this case were living in that share, in the old plot of Yousif Hassan Hussein. The latter was the head of the family, he was the father of the mother, second plaintiff, she and her husband—first plaintiff, seem to have married in that house, and begot their children—defendant was the first—and he was followed by three or four others, one was named in the case as Anwar. They all lived there until the house was demolished, in accordance with a replanning scheme in about September 1953, and all the family went out to live in a hired house.

The records of the replanning office showed that Yousif Hassan Hussein appeared before that officer about the plot that was to be awarded to him by way of compensation, and he asked that it be registered in the name of defendant. An order was made accordingly, and the plot was registered in name of defendant after paying the premium of £S.99.600m/ms., which is the house in dispute. As to the money compensation the evidence shows that according as to who constructed the buildings that were on the old plot, it was found that the late Yousif was entitled to £S.110.000m/ms. and the rest of the family were entitled to £S.93.000m/ms. Late Yousif received his share. The mother and her son Anwar testified that the £S.93.000m/ms. was given to defendant to pay the premium, and he did so pay it and the receipt, as a matter of course, was given out in his name. There is no reason to interfere with the finding of fact of the learned District Judge on the latter point. The registration of the plot in the name of defendant was effected on March 8, 1953. At this time, the father was absent in Saudi Arabia, but he returned later in the same year. Defendant stated in his evidence that he wrote to his father explaining to him what had happened about registration of the house to him, and requested him to come back to supervise the process of the building from the start.

The other point of fact requiring consideration is how much each one contributed in the building. There is no doubt that defendant did, the father did and even Anwar did contribute in the building. Defendant admitted at first that his father contributed the sum of £S.103.000m/ms but later tried in vain to withdraw this admission and also denied in his evidence the contribution of his father in the building. Defendant also admitted in his evidence that Anwar did contribute, but little. The father admitted on his part that defendant spent on the building the sum of £S.250.000m/ms only, the amount of the Government housing loan that he obtained for that purpose.

The story of defendant was as follows: He prepared a plan of a house assessed at £S.450.000m/ms and applied for a housing loan on November I1, 1953, and as the loan to which he was entitled was £S.250.000 his application was rejected. So he started to build gradually, until he made buildings worth about £S.150.000m/ms He applied again for the housing loan that was allowed, and he received the first instalment of £S.87.000 on July 22, 1954. He, therefore, completed the house consisting of three living rooms, two verandahs, a sitting saloon, kitchen and store. He stated that he spent until December 1955 the sum of £S.960.000m/ms. (including the above-mentioned premium and other fees). He added that in 1958 he spent for repairs the sum of £S.280.000m/ms.

The story of the father was as follows: He returned from Saudi Arabia in 1953 to find that no buildings were started on the plot. So he had to start, and did so out of his own money and spent the sum of £S.350.000m/ms. and the defendant’s loan was spent on completing the buildings that were at roof-level. He added that additions and repairs made in 1958 were shared by the three of them. Defendant was transferred to Cairo in 1955, stayed there for about three years, and came back in 1958.

Each one of them produced some evidence, in support of his own, that I need not go into. The learned District Judge found that defendant spent only the sum of £S.250.00m/ms. He thought that the rest of his evidence was not strong enough to prove all his contentions. I think it may be remarked that the evidence of the father’s witnesses was not much better than that of defendant.

However, one fact is clear that both of them had contributed in the building, that the house was built by their joint efforts, and that all the family lived in it from the start and they remain up to now living in it.

The third important point is of mixed fact and law; what was the agreement, express or implied, by virtue of which the house was registered in defendant’s name, and what is its effect on the right of the parties? Defendant stated in his evidence that his grandfather, Yousif Hassan Hussein, sold the house to him for a certain sum of money out of which he paid him £S.15.000 In cross-examination he stated that his grandfather relinquished his right in the house to him personally. The evidence of plaintiffs was to the effect that Yousif agreed with his daughter, second plaintiff, and her sons, including defendant, to surrender the house to them as a family house, and that she, defendant and her other son Anwar agreed to let it be registered in name of defendant as he was the eldest of his brothers so that he would be able to obtain a Government housing loan to build the house.

The learned District Judge, I think, rightly, dismissed defendant’s evidence and accepted plaintiffs’. The latter’s evidence was supported by other evidence; and the three of them, the mother and the two sons, appeared before the Replanning Officer with Yousif Hassan Hussein, when the latter requested him to register the house in name of defendant. I agree with the learned District Judge in holding that by virtue of an agreement, Late Yousif surrendered the house to his daughter or to the family, and by virtue of another agreement with her sons, she allowed the house to be registered in the name of defendant, so as to build it and they all live in it. It was the compensation for the old house in which they had lived, since they were established as a family.

The learned District Judge went on to decide that since the right to the house was first surrendered to the mother, a trust has been created in her favour, he ordered rectification of the register of the house in her name, and further ordered that defendant was entitled to £S.250.000m/ms. which is to be entered in the register as a charge, on the house. First defendant—the father—was struck out of the case, as having no interest.

Defendant made an application for revision to the Province Court. The learned Province Judge reviewed the two cases. Ahmed Mohamed Ibrahim v. Batoul Mustafa El Hassan, AC-REV-127-1964 (1966) S.L.J.R. 50, and Mariam Ahmed Gumaa v. Heirs of Daldoul Bakheit, AC-APP- (1966) S.L.J.R. 82, dealing with the applicability of the principle of resulting trusts to such cases, and following the first case, decided that there was no resulting trust in this case and accordingly reversed the decision of the District Judge and dismissed the claim.

The learned Province Judge introduced in his judgment a matter that had never been raised before; that if there was a resulting trust the transaction of registration of the plot in defendant’s name with the purpose of obtaining a Government loan to build a house for the family was illegal, because it was contrary to the Government regulations, governing the said loan; in that the said regulations provided that the purpose of the loan is to enable the official to build a house for himself. It was not shown that the said regulations have the force of law, in order to consider how it prohibited the loan in this case. Secondly, that the house was to be built for himself and his family does not amount to contradiction of purpose.

   Inasmuch as defendant is the registered proprietor, even if his title is subject to some beneficial rights, he is not committing any fraud against the Government by obtaining the loan. However, this case was instituted after the loan of the Government was fully settled, and the charge that was registered on the house has been removed.

I have now to deal with the effect of the implied agreement, that the plot be registered in the name of defendant in order to enable him to obtain a Government loan to build it as a house for the occupation of the family, together with the fact that the members (in particular the father) had contributed with him to the building and what interest or right they thereby have in the house. The answer to these questions leads to the consideration of the principle of implied or resulting trust.

The argument advanced by the two learned advocates for the parties was focused on the judgments of this court, in two recent cases, namely Ahmed Mohamed Ibrahim v. Batoul Mustaf a Hassan, (1964) S.L.J.R.50, and Mariam Ahmed Gumaa v. Heirs of Daldoul Bakheit (1966) S.L.J.R. 82. The former was decided first, but unfortunately it was not referred to in the latter. In the first, the family were living in the old Deim, on their demolition in 1950, they were given a plot in the New Deims. The mother caused this plot to be registered in the name of her minor son. In time she built a house in that plot and continued to receive its rent. The said mother instituted a suit against her son praying for an order conveying the house to her on the ground that there was created a resulting trust in her favour. This court set aside the decrees made in favour of the mother by the courts below. After referring to the case of Abbas Hassan v. Sid Ahmed Abbas, KHC-CS-1466- and Had El Zein Ramadan V. Heirs of Abu El Ruda Bakheit, ADCC-CS-440-1959, (1960) S.L.J.R. 34, in which the rule of resulting trust was applied by Hayes J. and Awouda P. J. Awadalla J. stated in his judgment that was concurred to by Imam J.:

“In my view the decisions of Hayes J., and Awouda P. J., which sought to deprive the register of its important attributes by reading into it the peculiar English principle of resulting trusts were entirely wrong. I think that once land is registered in the name of a proprietor, under the provisions of the Ordinance, a trust can only arise in accordance with these provisions, e.g., as a personal representative in accordance with section 68 as a receiver under section 72, or as a trustee by virtue of an instrument creating the trust under section 74. Otherwise a court cannot intervene in order to rectify the register unless it is proved that entry of the name of the proprietor was procured by fraud or made under a mistake of fact under section 85.” Ahmed Mohamed Ibrahim v. Batoul Mustafa El Hassan, (1966) S.L.J.R. 52.

    The learned judge also referred to Land Settlement and Registration Ordinance, s. 26 in connection with the case of Goldenburg v. Rachel Goldenbur & Others AC-REV-134-1969 (1960) SL.J.R. 36, and stated that under this section any allegation of gift not being intended would be defeated when made by voluntary transfer.

With great regret and diffidence, I differ from my learned colleague in this matter. In the first place, Land Settlement and Registration Ordinance, ss. 68, 72 and 74, deal with explicit and plain trusts, that a trust is made and a trustee is formally appointed; a. personal representative of the estate of a deceased person or the receiver in bankruptcy is formally appointed by court, or a trustee may otherwise be appointed by virtue of an instrument creating the trust. Each one of those trustees, when the trust property is registered in his name, shall hold it, subject to any restrictions imposed by law or by the instrument of his appointment, as a proprietor for all intents and purposes. But also each one of them holds subject to any unregistered rights or interests to which the property is liable, whether not requiring notification in the register or requiring such notification but not made. Land Settlement and Registration Ordinance, s. 26, deals with the proprietor to whom the property is voluntarily transferred without valuable consideration, its significance is that such a proprietor can, so long as his name appears in the register as proprietor, make a good transfer to another, as if the property was registered in his name for valuable consideration. It ends by these words “but some as aforesaid such transfer when registered shall in all respects and in particular as regards any registered dealing on the part of the proprietor have the same effect as a transfer of the same for valuable consideration.” Indeed it intended to emphasize the sanctity of the register, and to protect transfers from any proprietor to the other. Our register is a register of title, and the person whose name appears therein shall be deemed to he an absolute proprietor, in all respects and in particular when dealing with the property to third persons. I do not think, it can be read in this section that it intended to protect the proprietor to whom the property is transferred without valuable consideration, but it is clear in that it intended to protect dealings made by him to third parties.

To my mind the proper provision in the Ordinance on which reliance has to be placed as to whether a resulting trust can be created in respect of registered land is Land Settlement and Registration Ordinance, s. 252 explaining the effect of registration. It is worth being quoted in full as follows:

“The rights of a proprietor, whether acquired on first registration or subsequently for valuable consideration or by an order of the court

or of the Mohammedan Law Court shall be rights not liable to be defeated except as provided in this ordinance and shall be held by the proprietor together with all privileges and appurtenances belonging thereto according to the interest defined in the register and in this ordinance free from all other interests and claims whatsoever but subject as follows, that is to say:

a. subject to the charges, incumbrances, leases and other liabilities, and to the conditions and restrictions, if any, entered on the register,

b. subject, unless the contrary is expressed in the register, to such of the liabilities, rights and interests as are declared by this ordinance not to require notification on the register and are subsisting;

c. subject, where the proprietor is not entitled for his own benefit to the land (as between himself and the person beneficially entitled), to any unregistered rights or interests to which such person may be entitled.”

It speaks in plain language; to provide that the rights of a proprietor are not to be defeated except as provided in the Ordinance, and he shall hold the property free from all interests and claims, but subject to: first registered charges, etc., secondly, rights and interests that are not required to be notified in the register as shown in the Land Settlement and Registration Ordinance, s. 27, and thirdly, the unregistered rights and interests of persons beneficially entitled to the property. This last paragraph shows that a proprietor may hold not for his own benefit, but as a trustee for others, without this being shown on the register. This section is exhaustive as to the rights and interests, subject to which the proprietor holds the property, inter alia, the rights and interests of beneficial owners, that are not registered, no matter how the trust has been created. The members of a family may agree that their common property be registered in the name of one of them, intending that he holds it as proprietor for and on their behalf; he becomes their trustee. This may be done by a formal instrument to be notified in the register, as being so done under the Land Settlement and Registration Ordinance, s. 74, or it may be done in another mode without being notified in the register. In the latter case where the proprietor is not registered as a trustee, the intention of the interested person has to be found, so as to raise the presumption of an implied or resulting trust. In the case of the person who advances the money for purchase of property and allows it to be registered in the name of another, a presumption of an implied or resulting trust arises. In the case of the person who, in accordance with an agreement, pays money for construction of premises in the plot of another, a presumption of an implied or resulting trust arises in his favour. The immediately preceding rule was applied by this court in two cases. In the first the parties agreed

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that plaintiff pays money for construction of a bakery in a leasehold plot, and in considerat on defendant—the proprietor—promised to register three-quarters of it to him after completion of the buildings. In the second, defendant obtained a leasehold plot, he agreed with plaintiff to contribute in building, and that he would register it in their joint names. They were both about leasehold plots and the consent of the Government entangled the discussions, but nevertheless an implied trust was held to exist and the register was ordered to be rectified in favour of plaintiff. B. Awadalla J. stated in his judgment in the first case:

“The fact that the whole interest was thus to be registered in the name of applicant (when in reality he was in due course oniy to have one quarter share) amounted to a ‘feoffment without consideration’ in so far as the excess is concerned and, therefore, rendered the agreement to that one of implied trust.”

The principle of implied trust is a general principle of equity, and it is reasonable and fair, and it is not declared by the Land Settlement and Registration Ordinance, nor by any enactment in force in the Sudan, to be inapplicable but, rather allowed as I stated before. I have, therefore, no doubt that it has to be applied in the Sudan, in appropriate cases. Equity and justice require that a person, who acquires by any means an unregistered beneficial right or interest in any property, shall have that right or interest realized and secured for his benefit or enjoyment.

I need not repeat the statements of law that I made in the judgment in the case of Mariam Ahmed Gumaa, suffice it to mention here that I think they still hold good and represent the law on this matter.

In the present case, the house in dispute was awarded as compensation— freehold at the minimum premium—for the other house that used to be the family house and the family had occupied it up to the date of its demolition. The compensation was awardable to Yousif Hassan Hussein—the registered owner of the old house, and as he had left that house to the family consisting of his daughter, her husband and children, he intended to leave the new house to them. Then an agreement was reached that the house be registered in the name of defendant. The father was outside the country, it was not known when he would be back, defendant was the eldest son, a Government official, and could obtain a Government loan to build the house for the family to live in. Furthermore the father came back before defendant could obtain the loan or start any building. The father started out of his own funds to build; they completed the house with their joint efforts. They lived in the house and have been living in it since I954 and up till the present.

Defendant became a proprietor without valuable consideration, and the intention was that he holds for and on behalf of the family, including

                                                      himself, who have beneficial interest in the house. Here arises a presumption of a resulting trust, which defendant could not rebut. He could not prove that the house was given to him personally and that he built it by his own money and single effort.

The last question is how the beneficial interests of plaintiff can be realised and secured. I have to point out that the striking out of the name of the father from the suit was wrong, since he is a member of the family and also contributed to the buildings; it was also wrong to register the house in the name of the mother and give defendant only a charge on the house for his money.

It seems possible to declare a trust in the property—in the name of plaintiffs, the father and mother, as beneficiaries, defendant being the trustee and so cause it to be notified in the register. This may be more in conformity with the spirit of the Land Settlement and Registration Ordinance, as it avoids the rectification of the register. But it would be a novelty and constitutes departure from the practice which has been adopted of substituting the beneficiaries as proprietors in the register. This rule is based on the principle that the trustee has to be compelled to give up the trust property when so demanded. Then, as to what proportions they should be entitled. It is difficult to think of any rule other than that of equity is equality; that the three parties in the case be co-proprietors in equal shares.

This revision is allowed, an order to issue for registration of the house in dispute in the names of first plaintiff, second plaintiff and defendant in equal undivided shares.

No order as to costs.

Hassan Abdel Rahim J. May 11, 1968:—I agree. The respondent became a proprietor of the plot without valuable consideration. The transaction was a family arrangement by virtue of which respondent built on the plot for and on behalf of the family. There was a clear presumption of a resulting trust which respondent failed to rebut. The idea of registering the plot in the name of first plaintiff, second plaintiff and defendant in equal undivided shares is quite fair.

El Rayah El Amin C.J. May 11,1968:- 1 concur.