McCoy v Allibhai (Civil Appeal No. 3 of 1947) [1947] EACA 4 (1 January 1947)

## COURT OF APPEAL FOR EASTERN AFRICA

## Before NIHILL, C. J. (Kenya), SIR G. GRAHAM PAUL, C. J. (Tanganyika), and EDWARDS, C. J. (Uganda) $\mathbf{C}$

## DIRKJEE McCOY (as legal representative of J. J. McCoy), Appellant (Original Plaintiff)

# ABDUL AZIZ ALLIBHAI (as Administrator of the Estate of Ismail Allibhai), Respondent (Original Defendant)

# Civil Appeal No. 3 of 1947

### (Appeal from decision of H. M. Supreme Court of Kenya)

Value of subject matter in appeals to E. A. C. A.—Section 74 Kenya Civil Procedure Ordinance—Right of executor to bargain for reward.

J. J. McCoy was appointed executor under a will. He refused to undertake his duties as executor unless remunerated. As a result two persons interested in the estate, Ismail Allibhai and M. G. Wahl, agreed to pay him Sh. 1,000 and J. J. McCoy duly wound up the estate. Ismail Allibhai refused to pay his share and an action was brought by legal representative of J. J. McCoy in the Resident Magistrate's Court, Eldoret, to enforce the agreement. The learned Resident Magistrate held that the agreement was unenforceable as contrary to public policy. The plaintiff appealed to H. M. Supreme Court of Kenya (Bourke, J.) who affirmed the decision and then to H. M. Court of Appeal for Eastern Africa.

- Held (1-8-47) by H. M. Court of Appeal for Eastern Africa. That under section 74, Kenya Civil Procedure Ordinance, no second appeal lies when the value of the subject matter of the original suit does not exceed £50 unless special leave has been first obtained. Appeal accordingly dismissed. - Held (6-12-46) by H. M. Supreme Court of Kenya (Bourke, J.):—It is a general principle that a personal representative is entitled to no allowance for trouble and loss of time in the execution of his duties. The Courts will enforce agreements to the contrary with great caution. In the present case the plaintiff had failed to show that the learned Resident Magistrate had erred. The appeal accordingly failed.

Cases referred to: Robinson v. Pett 3 P. Wms. 251 (24) E. R. 1049; Re Sherwood 3 Beav. 338 (49) E. R. 133; Douglas v. Archbutt 2 De & J. 148 (44) E. R. 944; Ayliffe v. Murray 2 Atk, 58 (26) E. R. 433; Barrett v. Hartley 12 Jur. (NS) 426; Gould v. Fleetwood 2 Eq. Ca. Abr. 453 (22) E. R. 385.

Shaw for the appellant.

#### S. C. Gautama for the respondent.

NIHILL, C. J.—Counsel for the respondent has raised a preliminary objection which if sustained makes it impossible for us to entertain this appeal.

Under Section 74 of the Kenya Civil Procedure Ordinance no second appeal shall lie in any suit when the amount or value of the subject matter of the original suit does not exceed £50, unless special leave has been first obtained from the second appellate Court. The subject matter in this suit did not exceed £50. Special leave has not been first obtained.

Counsel for appellant has admitted the strength of this objection but asked. the Court forthwith as an indulgence to grant special leave on the ground that the point of law raised in the appeal is one of considerable public importance. I am of the opinion that this request cannot be conceded for to do so would be to ignore the Rules of this Court with regard to the procedure such application must take (vide Rule 9) I am also of the opinion that the preliminary objection taken by counsel for the respondent is a good one and must be sustained.

I would therefore strike out the appeal, without prejudice to any application which the appellant may be advised to make under Rule 9.

SIR G. GRAHAM PAUL. C. J.-I concur.

EDWARDS, C. J.—I concur.

JUDGMENT OF H. M. SUPREME COURT OF KENYA (BOURKE, J.).-This is an appeal from a decision of the Resident Magistrate's Court sitting at Eldoret. The circumstances are not in dispute and this appeal turns solely upon an issue of law. The appellant is the widow and legal representative of the late Johannes Jacobus McCoy who died in May, 1939. Johannes McCoy was appointed executor under the Will of the late Pieter Alexander van Breda dated the 8th February, 1927; there was a codicil to this Will made on the 20th September, 1929. It is admitted that no express provision was made under the said Will for remuneration of the executor so appointed, but he did receive a legacy of some cattle which apparently he was unable to realize for the reason, as I am told, that they could not be found.

Under the codicil the testator bequeathed his interest in two mortgages to the late Ismail Allibhai as more particularly set forth in paragraph 4 of the plaint. The first respondent, Abdul Aziz Allibhai, is sued in these proceedings as the legal representative of the said Ismail Allibhai deceased. The late Pieter van Breda had in his lifetime entered into the arrangement for purchase of land by M. G. Wahl, the second respondent, as is described in paragraph 5 of the plaint. Mr. Wahl, who was joined *pro forma*, is not an interested party to these proceedings.

The late Johannes McCoy was not prepared to enter upon his duties as executor under the Will of Pieter van Breda without remuneration for his trouble and accordingly the late Ismail Allibhai and Mr. M. G. Wahl entered into an agreement as appears from the contents of the document Exhibit A addressed to Johannes McCoy as follows: -

"J. J. McCoy, Esq.,

Dear Sir,

We understand that you are not prepared to take on the responsible duties of executor of the Estate of the late P. A. van Breda unless you receive as executor the sum of not less than Sh. 1,000 and that you are entitled to pay to your advocate his charges for doing the legal work of settling the estate. We are interested in the estate and we agree that we will allow you to deduct from what comes to us or will pay to you pro rata according to the benefits we receive up to the said sum of Sh. 1,000 and your legal expenses. We acknowledge that it is on this understanding that you now agree to make application for probate.

Yours truly,

# (Signed) ESMAIL ALLIBHAI.

$15 - 1 - 37$ .

#### (Signed) M. G. WAHL.

$15 - 1 - 37.$

Upon obtaining that undertaking Johannes McCoy took out probate of the Will and duly entered upon his duties as executor and wound up the estate apparently to the satisfaction of all concerned.

In due course Mr. Wahl paid the late Johannes McCoy Sh. 300 as his proportionate share in the sum of Sh. 1,000 fixed under Exhibit A. No question now arises as to the correctness of the proportionate amounts. Towards the end of 1938 Johannes McCoy approached Esmail Allibhai for payment of his sharein the Sh. 1,000 but the latter declined to pay any part of the said amount. Johannes McCoy died in 1939 and in August, 1943, his legal representative lodged

this claim for Sh. 700 against the legal representative of the late Esmail Allibhai, such sum being the proportionate amount of the Sh. 1,000 settled under the document quoted, Exhibit A. Upon the argument as it proceeded before him the learned Magistrate framed the issue "Is the agreement marked A herein and dated 5-1-37 unenforceable as being against public policy or for any other reason?" That is the sole question that arises for decision before this Court. The learned Magistrate held that the agreement Exhibit A was unenforceable as being contrary to public policy.

I have been referred to no case in which a Court has upheld and enforced such a contract. It is a general principle that a personal representative is entitled to no allowance, at law or in equity, for personal trouble and loss of time in the execution of his duties, Robinson v. Pett 3 P. Wms. 251 (24) E. R. 1049. A trustee may at the time of accepting the trust *contract* for an allowance or remuneration for his services Re Sherwood 3 Beav, 338, (49) E. R. 133, Douglas v. Archbutt 2 De. & J. 148 (44) E. R. 944, but bargains of this kind are watched by the Court. with exceeding jealousy (Ayliffe v. Murray 2 Atk. 58 (26) E. R. 433), and must be freely made and not submitted to from pressure, *Barrett v. Harley* 12 Jur. (NS) 426. Where the contract is valid originally the conditions of it must be fulfilled to the letter, or the trustee is not entitled to his reward (Lewin on Trust 13th Edn. 459). Where the execution of his office was likely to be attended with trouble, and the executor, who had no legacy, and who at first declined, but afterwards agreed with the residuary legatee, in consideration of a hundred guineas, to act in the executorship, died before the execution of the trust was completed, the Court refused the claim of his executors to be allowed that sum out of the trust money in their hands, observing that *independently* of the executor's having died before the trust was executed such bargains ought to be discouraged, as tending to dissipate the property, Gould v. Fleetwood (1732) 2 Eq. Ca. Abr. 453 (22) E. R. 385. In Ayliffe v. Murray (sup.) Lord Hardwicke, C. is reported as saying: -

"There may be cases where the Court will establish an agreement, made with a trustee for an extraordinary allowance, beyond the terms of the trust.

Whether upon general grounds a trustee may make an agreement with a cestui que trust for an extraordinary allowance, over and above what he is allowed by the terms of the trust. I think there may be cases where this Court would establish such agreements, but at the same time would be extremely cautious and wary in doing it.

In general this court looks upon trusts as honorary, and a burden upon the honour and conscience of the person entrusted and not undertaken upon mercenary views: and there is a strong reason too against allowing anything beyond the terms of the trust, because it gives an undue advantage to a trustee, to distress a *cestui que trust*, and therefore this Court have always held a strict hand upon trustees in this particular. If a trustee comes in a fair and open manner, and tells the cestui que trust that he will not act in such troublesome and burdensome office, unless the cestui que trust will give him a further compensation, over and above the terms of the trust, and it is contracted for between them, I will not say this Court will set it aside, though there is no instance where they have confirmed such a bargain."

That case was decided in 1740, and, as I have said, no later case has been brought to my notice where such a bargain has been confirmed, nor, on such research as I have been able to make, have I succeeded in discovering any such case. It was put forward on behalf of the appellant both before this Court and the Lower Court that if the executor had not agreed to act trouble and greater expense would have been incurred; accordingly the persons subscribing to the agreement took a sensible course in agreeing to pay Sh. 1,000, to induce the executor appointed to act as such, and the contract was reasonable and to their

benefit and should be enforced. But it seems to me that we have there something very like an admission that the fatal element of pressure was present. However that may be, there is the term of the agreement permitting a deduction of the Sh. 1,000 from the assets, which if acted upon would tend to dissipate the estate. In fact it appears that no actual deduction was made but that the alternative course provided was adopted by the executor. One of the persons interested paid his pro rata share of Sh. 300 and the other, the appellant, is, sued for the remaining Sh. 700. But the net effect is on one aspect surely the same for it means, if the appellant is to recover, that the legatee has got what is to come to him under the provisions of the Will less the amount of Sh. 700 he would have subsequently to disburse to the executor. It is argued that Gould v. Fleetwood (sup.) is not against the appellant because in that case the executor died before the execution of the trust was completed whereas here the estate was duly wound up; but it is to be noted that the Court observed that independently of the executor's death before the trust was executed, such bargains ought to be discouraged as tending to eat up the trust. In so far as the intention of the testator can be said to have any bearing, it is not in dispute—the Will was not put in evidence—that the late Johannes McCoy was granted a legacy of some cattle, which apparently were not found.

Before enforcing a bargain such as this it is necessary in the words of Lord Hardwicke (Ayliff v. Murray, sup.) that a Court should be extremely wary and cautious. Approaching the question in that frame of mind I find myself unable to say that the learned Magistrate has erred in the conclusion he has reached. I accordingly dismiss the appeal with costs.