Report No. 70
Time for Performance
Transfers of property are sometimes conditional on the performance of an act by the transferee. The transfer may not specify the time of performance, or it may specify such time. The first case is dealt with by section 33, and the second case by section 34. In the first case, the condition may be a condition precedent or a condition subsequent. The case of a condition subsequent is the case which section 33 has in mind, vide the use of the words "condition is broken", and the illustration to the corresponding section 136 of the Succession Act.
The case of a condition precedent is not dealt with by section 33, and must be left to be dealt with by the general rule1 as to contingent interest under which, until the condition is performed, the interest will not vest. The language of section 34 which deals with cases where time is specified, is, in contrast, wide enough to cover both the types of conditions.
1. Section 21, fist two sentences.
31.1A. Section 33-Transfer condition on performance of act, no time being specified for performance.- Section 33 provides that where, on a transfer of property, an interest therein is created subject to a condition that the person taking it shall perform a certain act, but no time is specified for the performance of the Act, the condition is broken when he renders impossible, permanently or for an indefinite period, the performance of the Act.
31.2. Analogous law.-
This section corresponds to section 136 of the Succession Act, and section 34 of the Contract Act1.
The two illustrations appended to section 136 of the Succession Act are instances of cases (i) when the fulfilment of the condition is rendered impossible and (ii) when its fulfilment is indefinitely postponed2. These illustrations run as follows:-
"(i) A bequest is made to A, with a proviso that unless he enters the Army, the legacy shall go over to B. A takes Holy Orders, and thereby renders it impossible that he should fulfil the condition. B is entitled to receive the legacy.
(ii) A bequest is made to A, with a proviso that it shall cease to have any effect if he does not marry B's daughter. A marries a stranger and thereby indefinitely postpones the fulfilment of the condition. The bequest ceases to have effect."
The principle embodied in this section is the same as discussed in the discussion under the preceding sections. In this section the contingency is only the act of the person on which the transfer depends, and the transfer fails on account of his own act.
31.3. English law.-
Illustration (ii) to section 36, Succession Act quoted above,1 is not in consonance with the English law on the subject. Thus, in a case2 where a testator, after giving certain legacies to J and M, added-"If either of these girls should marry into the families of G or R, and have a son, I give all my estate to him for life (with remainder over); and if they shall not marry", to other persons. Lord Thurlow held this to be a condition precedent; and that nothing vested in the devisees over, while the performance by J and M was possible, which was during their whole lives; and that their having married into other families did not preclude the possibility of their performing the condition, as they might survive their first husbands.3
1. Para. 31.1, supra.
2. Randall v. Payne, 1 BCC 55.
3. 2 Jarm 3; see also Lester v. Garland, 15 Ves 248.
31.3A. No change.- No change is needed in section 33.
31.4. Section 3.-
Transfer Conditional on performance of act, time being specified.-Where the time for performance of the act is specified, the matter is dealt with by section 34, as under:
"34. Where an act is to be performed by a person either as a condition to be fulfilled before an interest created on a transfer of property is enjoyed by him, or as a condition on the non-fulfilment of which the interest is to pass from him to another person, and a time is specified for the performance of the act, if such performance within the specified time is prevented by the fraud of a person who would be directly benefited by non-fulfilment of the condition, such further time shall, as against him, be allowed for performing the act as shall be requisite to make up for the delay caused by such fraud.
But if no time is specified for the performance of the act, then, if its performance is by the fraud of a person interested in the non-fulfilment of the condition rendered impossible or indefinitely postponed, the condition shall, as against him, be deemed to have been fulfilled."
In order to constitute fraud, there must be some abuse of a confidential position, some intentional imposition or some deliberate concealment of facts.1 The term 'fraud' has been thus defined in the Indian Contract Act2-
"17. Fraud means and includes any of the following acts committed by a party to a contract or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:
(1) The suggestion, as to a fact, of that which is not true, by one who does not believe it to be true;
(2) The active concealment of a fact by one having knowledge or belief of the fact;
(3) A promise made without any intention of performing it;
(4) Any other act fitted to deceive;
(5) Any such act or omission as the law specially declares to be fraudulent.
Explanation.- Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or unless his silence is, in itself, equivalent to speech".
1. Dean v. Thwaite, 21 Beav 621.
2. Section 17, Contract Act.
This definition of fraud, however, is by no means exhaustive. Indeed, of fraud no definition is possible. It is infinite: crescit in orbe dolus.1 Fraud may be positive or constructive. In the latter category, the term is used in its widest sense as embracing such acts or contracts, as, though not originating in any actual evil design or contrivance to perpetuate fraud or injury upon others, yet, by their tendency to deceive or mislead, or to violate public or private confidence, or, to injure the public interests, are equally reprehensible with positive fraud, and therefore, equally prohibited.2
2. Story, Eq. furls., p. 253.
31.7. Scope.- Section 34 is general and would apply equally to a condition whether precedent or subsequent.1
1. Sidhee Nusur v. Oojoodhyaram, 10 MIA 540; Edwards v. Aberayon Mutual Insurance Society, I QBD 563.
The justification for the rule is the broad principle that no man can take advantage of his own fraud, or as Coke says: "Fraud at dolus, nemini patrocinari debent".1 It is contrary to natural justice that a person who prevents a thing from being done should avail himself of the non-performance he has occasioned. The rule in the first place goes only so far as to undo the mischief attempted, where that can be done, and not to the extent of entirely dispensing with the observance of the condition, but where this would entail indefinite delay or inconvenience, equity regards it as done, what would have been done, but for the fraud of the adversary who is thenceforward precluded from taking advantage of it.2
Not man shall gain a right by his own wrong, this does not imply that if he had a right independently of the fraud, he shall lose it, or the power of exercising it, by a wrong done in connection with it. The rule, again, is inapplicable where the right of a third party is to be affected. For a man cannot, by his wrongful act to another, deprive a third person of his right, against another.3
31.9. No change.- No change is needed in the section.
1. I.e. "Fraud and deficit ought not to be benefit any person", 3 Co. 78. The same sense is conveyed by the maxim "Nullus commodum capere potest de injuria sua propria" (No one can take advantage of his own wrong). So Ex dolo malo non oritur actin. (A right of action cannot arise out of fraud).
2. Rooper v. Lane, 6 HLC 443 (460, 461); London Celluloid Co. (in re:), 39 Ch D 190 (206).
3. Cf. S. 108, Indian Contract Act (IX of 1872).