Wakilii

Cohen v Hussein and Others (Civil Appeal No. 52 of 1955)

East African Court of Appeal · [1950] EACA 161 · 1950 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from Supreme Court of Aden challenging dismissal of suit to set aside land transfer alleged to be fraudulent conspiracy to defeat creditor's claim
Decision
Transfer declared void and cancelled; land shares remain property of judgment-debtors and liable to attachment under appellant's decree

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court of Appeal held that the transfer of land shares was void as a conspiracy to defeat a creditor's claim. The trial judge erred in failing to consider key evidence establishing the transferees' active participation in the conspiracy, including their joint consultation with an advocate, a false receipt for the purchase price, and admissions in pleadings. The transaction was void from inception under section 6(2) of the Transfer of Property Ordinance as having an unlawful object opposed to public policy. A single creditor may sue to set aside such a void transaction without proceeding as a representative action.

Outcome

Transfer declared void and cancelled; land shares remain property of judgment-debtors and liable to attachment under appellant's decree

Facts

The appellant, a moneylender, obtained a decree for Sh. 24,071 against the second and third respondents, who had inherited one-fifth shares each in land from their deceased father. Before judgment, the respondents transferred their shares to the first respondent firm for a stated consideration of Sh. 30,000. The appellant's two applications for attachment before judgment were dismissed for defective affidavits. After obtaining decree and executing against the judgment-debtors, over Sh. 20,000 remained unpaid. The transferors gave a receipt for the full purchase price on the date of transfer, but the price was not actually paid then and may never have been paid in full. Evidence showed the transferors and a partner of the transferee firm jointly consulted an advocate about defending the appellant's claim, with the transferee paying the advocate's fee.

Issues

  1. Whether the transfer of land shares was made in pursuance of a conspiracy to defraud the appellant creditor and defeat the ends of justice.
  2. Whether the transferees were parties to the alleged conspiracy.
  3. Whether the transaction was void or merely voidable.
  4. Whether the suit was properly brought under section 53 of the Transfer of Property Ordinance or on another basis.
  5. Whether a single creditor could bring suit without proceeding as a representative action on behalf of all creditors.

Orders

  • Appeal allowed.
  • Judgment and decree of the Supreme Court set aside.
  • Declaration made that the transaction was null and void as against the appellant.
  • Registered copy of the transfer instrument to be marked as cancelled under section 38(2) of the Specific Relief Ordinance.
  • Original transfer instrument to be delivered up to the appellant under section 38(1).
  • Second and third respondents enjoined from dealing with or disposing of the shares in question.
  • Respondents to pay the appellant's costs in the Court of Appeal and in the court below.

Rules and key headnotes

Contract Law — Unlawful Object — Transfer to Defeat Creditor's Claim — Void Transaction
A transfer of property made pursuant to a conspiracy between transferor and transferee to defeat a creditor's claim and pervert the course of justice is void from inception under section 6(2) of the Transfer of Property Ordinance as having an unlawful object opposed to public policy, not merely voidable under section 53.
Evidence — Adverse Inference — Failure to Call Material Witness
Where a party gives evidence and calls witnesses but fails to call a material witness who could prove or disprove a critical fact within that party's knowledge, the court may draw an adverse inference against that party.
Evidence — Conspiracy — Admissibility of Co-Conspirator Statements
Under section 10 of the Evidence Ordinance, where prima facie evidence of conspiracy exists, statements made by one alleged conspirator in pleadings are admissible as evidence against other alleged conspirators to prove the existence and scope of the conspiracy.
Land & Property — Void vs Voidable Transfers — Distinction
A transfer void under section 6 of the Transfer of Property Ordinance for unlawful object is a nullity from inception and never operates to transfer title, whereas a transfer voidable under section 53 for intent to defeat creditors is binding between the parties until set aside and requires a representative action by or on behalf of all creditors.
Civil Procedure — Representative Action — When Not Required
A suit by a single creditor to set aside a transfer as void for conspiracy to defeat that creditor's claim is not a suit under section 53 of the Transfer of Property Ordinance and need not be brought as a representative action on behalf of all creditors, though any attachment made may enure for the benefit of all creditors through rateable distribution.
Tort Law — Conspiracy — Remedy by Declaration
A suit for the tort of conspiracy to defeat a creditor's claim may lie at the instance of a single creditor for his own benefit, and a declaration that the impugned transaction is void may be an appropriate remedy in such an action, with directions for cancellation of registration being ancillary.

Legislation cited (17)

  • Aden Civil Courts Ordinance s.91(b)
  • Aden Civil Courts Rules r.442
  • Aden Evidence Ordinance s.10
  • Aden Transfer of Property Ordinance s.6(2)(i)
  • Aden Transfer of Property Ordinance s.6(2)(ii)
  • Aden Transfer of Property Ordinance s.53
  • Law of Property Act 1925 s.172
  • Aden Interpretation and General Clauses Ordinance s.41
  • Indian Transfer of Property Act s.6(h)
  • Indian Transfer of Property Act s.23
  • Aden Contract Ordinance s.25
  • Indian Contract Act s.17
  • Indian Contract Act s.23
  • Aden Documents Registration Ordinance s.9(1)(b)
  • Aden Specific Relief Ordinance s.38(1)
  • Aden Specific Relief Ordinance s.38(2)
  • Indian Specific Relief Act s.39

Cases cited (13)

  • Radhika Mohan Gope v Hari Basha Saha (A.I.R. 1933 Cal. 812)
  • Ishrar v Devar ((1903) 27 Bom. 146)
  • Abdul Hye v Mir Mohamed Mozaffar Hosein (11 I.A. 10)
  • Amarchand v Gokul (5 Bom. L.R. 142)
  • Rambilas Sitaram v Ganpatrao Pandharinath (A.I.R. 1954 Nagpur 129)
  • B. D. Patel v Dunbhai (16 Bom. 1)
  • Reese River Silver Mining Co. v Atwell (L.R. 7 Eq. 347)
  • Hakim Lal v Mooshara Sahu (34 Cal. 999)
  • Chutterput Singh v Maharaj Bahadoor (31 I.A. 1)
  • Madina Bibi v Ismail (63 Mad. 808)
  • Gregg v Holland ((1902) 2 Ch. 360)
  • Rajan Harji v Ardeshir (4 Bom. 70)
  • Bhojraj v Verharam (I.L.R. (1946) Kar. 98)

Full judgment

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Cohen v Hussein and Others (Civil Appeal No. 52 of 1955) [1950] EACA 161 (1 January 1950)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.