1. It is necessary to set out in some detail the facts found in this case.
2. In execution of a decree against the father of the 2nd defendant the house in dispute was attached; the plaintiff, by his next freind, laid claim to the property as vendee of the 2nd defendant, and, obtained a decree declaring him to be the owner, In the suit in which this decree was obtained he and the attaching creditor and the 2nd defendant were parties, the 2nd defendant being then the 3rd defendant. The Court found tlrat the property was the self-acquisition and separate property of the 2nd defendant, Mondi Venkanna, purchased by him after separation from his father.
3. On the strength of the declaration and his title as vendee, the plaintiff, by his next friend, now sues for possession of the house and site, and the 2nd defendant, who is in possession, resists the suit on the ground that the sale-deed was nominal and colorable, and executed because the 2nd defendant ' had to pay certain debts at the time.' The Court of first instance has found that the sale to the plaintiff was not valid or supported by consideration; that the 2nd defendant has remained in possession after the sale-deed as before it; and that money borrowed In the plaintiff's name for the reconstruction of the house after a fire was paid off by, and borrowed from, the 2nd defendant. The lower appellate Court concurs in these findings, and both Courts have dismissed the suit, the question of law raised in the appeal memorandum to the lower appellate Court (grounds 5 & 6) not being dealt' with by the Subordinate Judge.
4. Finally, it is not found by either Court that the 2nd defendant has, or ever had, any creditor who has been defrauded by the colorable sale to the plaintiff. On the finding of the Court in the former suit, the creditor of the 2nd defendant's father could, in no circumstances, have had recourse to this property, whether it had, or had not, been sold-to the plaintiff.
5. In these circumstances the plaintiff appeals, contending that the 2nd defendant, being a party to a collusive decree, cannot set up the collusion to defeat the effect of the decree; and the respondents, on the other hand, contend that no fraud was effected by the decree, and consequently, the plaintiff can rely on it only as estopping the 2nd defendant from contesting it, and, inasmuch as the plea of res judicata was not taken in the Court of first instance, effect cannot be given to that plea now. It is also contended for the respondents, and not denied of behalf of the appellant that, as the law has been laid down by this Court, a purchaser cannot demand possession of the purchased property until he has paid the purchase-money.
6. Now, it was the case of the 2nd defendant that the nominal sale was intended to shield the property from his creditors. That is what he alleged in his written statement. - Upon that case the first issue was drafted, and upon that case the Subordinate Judge in the appeal propounded the question for his decision. We must take it, in these circumstances, that the keeping up of the sham in the suit No. 218 of 1894, though it may not have deprived the 1st defendant in that suit of the property, was none the less a fraudulent and collusive proceeding intended to carry out the fraudulent intention in pursuance of which the sale-deed was originally executed and registered.
7. The 2nd defendant is now alleging his own fraud to escape from the consequence of the decree thus fraudulently and collu-sively obtained, and on the authorities in this Court he cannot be allowed to succeed - Venkatramanna v. Viramma I.L.R. (1886) M. 17; Rangamma v. Venkatachari I.L.R. 18 M. 378; Yarmati Krishnayya v. Chandru Papayya I.L.R. (1897) M. 326. I do not think Petherfierumal Chetty v. Muniandi Servai I.L.R. (1908) C. p. 559 overrules these authorities. In that case the question of the effect of a decree between the parties is not discussed. We must, therefore, in my opinion, proceed in the view that the decree is a subsisting and effectual decree, and that, as between himself and the 2nd defendant, the plaintiff is the owner of the house and site in dispute. He is, therefore, entitled to possession, but both Courts have found that he has not paid the price fixed in the sale deed. I have had some doubt whether the plaintiff ought to be allowed to succeed without now paying the price before obtaining possession, but as I find that the decree in the former suit was basedon a finding that he had paid the price, or at any rate a large portion of it, I think that to direct him to do so now would in effect be to call in J question the decree, which is just what neither party can be permitted to do.
8. I would, therefore, reverse the decrees of the Courts below, and give the plaintiff a decree, but, in the circumstances, without costs.
Abdur Rahim, J.
9. It is a clear and well-established principle of law that when the decree of a Court has been passed, upholding a certain transaction between the parties to a suit, neither the plaintiff nor the defendant will be allowed afterwards to say that the decree was the result of a collusive arrangement arrived at by them in order to carry out a scheme of fraud, and that it should, therefore, be treated as a nullity, and the state of things which existed previously to the passing of such decree be restored. And so also when two persons have combined to defraud a third person, and succeeded in their effort without obtaining the decree of a Court, the Court will not permit one of the parties to such fraud to show that the transaction between him and the other party to the fraud was not really what it purported to be, and that it does not therefore bind him.
10. In the first case, the decree is regarded as a subsisting and effectual decree, so that the question covered by it is treated as res judicata, and in the second case, the Court refuses it on the grounds of public policy to help a man who, by his act, has imposed upon another to get rid of the consequences of that act as against himself. The subject is fully discussed in Chenvirappa v. Puttappa I.L.R. (1887) B. 708; and the law as explained therein has been accepted in Rangammal v. Venkatachari I.L.R. 18 M. 378. That being so, the defendants, in the suit out of which this second appeal has arisen, have no proper answer to make to the plaintiff's claim. Sometime between May 1893 and June 1894 a creditor of the 2nd defendant's father, in execution of a decree obtained by him, attached the property which is the subject-matter of this suit, alleging that it belonged to his judgment-debtor. Thereupon the present plaintiff preferred a claim to the property, stating, that he had purchased it under a deed of sale, dated the 21st May 1893, from the 2nd defendant who owned it as his separate and self-acquired property. He succeeded in establishing this claim in O.S. No. 218 of 1894 with the aid of the 2nd defendant who was impleaded in that suit as the 3rd defendant, obtaining a decree declaring his right to the property, with the result that it was released from attachment. It is argued on behalf of the respondents that it being found in O.S. No. 218 of 1894 that the house in question was the separate property of the 2nd defendant, there was no necessity for propounding the nominal and colorable deed of sale executed by the 2nd defendant in favor of the plaintiff. But even if that be so, the conveyance was put into use in order to put off the creditor of the 2nd defendant's father, and that, in my opinion, is sufficient to estop the 2nd defendant from saying that between himself and the plaintiff the sale was a sham. Further, as I have said, there being a decree of the Court in favor of the plaintiff declaring the validity of the sale in the presence of, and with the concurrence of, the 2nd defendant, the question is concluded once for all so far as those two persons are concerned. The learned vakil for the respondents, however, urges that the plaintiff is not, in any case, entitled to have possession of the property without paying the amount of consideration mentioned in the deed of sale, as it has been found that no part of the consideration was paid by him. But I do not think that this contention is well founded. In the first place, it is the case of the defendants themselves that it was never intended that any money should be paid. And the law being that, in circumstances such as these, the effect of the apparent transaction, especially when, as in this case, it has been confirmed by a decree of the Court, cannot begot over by shewing that the real transaction was something different, if we were now to compel the plaintiff to pay the purchase-money as a condition precedent to his recovering possession of the property, the force of the rule would be materially impaired. The decision in Subramaniya Aiyar v. Poovan I.L.R. (1902) M. 28 cited at the bar is not, in my opinion, relevant to the question. That was the case of the buyer of a certain property under a bona fide deed of sale seeking to recover possession of it from the vendor who claimed to retain possession by virtue of a lien for his unpaid purchase-money. For these reasons, I agree that the judgments of both the lower Courts should be reversed and the suit of the plaintiff be decreed, but that, in the 'circumstances of the case, each party should bear his own costs throughout.