Judgement Appeal from a judgment and decree of the Chief Court, Appellate Side (August 3, 1914), reversing a judgment of Robinson J. upon a new trial. The respondents, as heirs and representatives of U Shwe Pe and Ma Shwe La, his wife, instituted a suit in the Chief Court of Lower Burma against Maung Kyin (since deceased) and Ma Ngwe Zan, his wife. They claimed possession of immovable property in the neighbourhood of Rangoon under two deeds of conveyance, both dated March 4, 1903. The defendants contended that the deeds, though in form absolute conveyances, were intended by the parties to be transfers of the rights of the defendants under deeds by which the property was in form absolutely conveyed to them, but which they contended were intended by the parties to operate merely as mortgages. The facts appear from the judgment of their Lordships. The suit originally came on for trial before Ormond J. on April 17, 1901, when it was held, upon the authority of the Full Bench ruling in Maung Bin v. Ma Hiding (3 Lower Burma Rulings, 100.), that the defendants, the present appellants, were precluded by s. 92 of the Indian Evidence Act, 1872, from giving oral evidence to show that the conveyances were intended to operate as mortgages or transfers of mortgages, and a decree for possession was made. On December 16, 1908, the decree was affirmed upon appeal. The present appellants appealed from that decision to His Majesty in Council, contending, in substance, that they were not precluded by s. 92 from adducing evidence as to the acts and conduct of the parties to the deeds with a view to establishing the nature of the transaction. The Judicial Committee, by a judgment delivered on July 11, 1911, reported at L. R, 38 Ind. Ap. 146, held that the case for the appellants disclosed a charge of fraud against the respondents in relation to matters antecedent to the deeds of March 4, 1903, upon which charge much of the evidence tendered would be material; further, that s. 92 did not preclude evidence as to a fraudulent dealing with a third persons property, nor proof of notice that the property purporting to be absolutely conveyed belonged to a third party who was not a party to the conveyance. Their Lordships, without expressing any opinion upon the construction or application of s. 92 in relation to the deeds of March 4, 1903, held that the evidence tendered should be admitted, subject to objection, and they ordered a new trial. Upon the new trial Robinson J., by his judgment delivered on June 17, 1912, held that Myaing and Maung Kyin intended the transfers between them to be merely mortgages ; that Myaings object in the negotiations which resulted in the deeds of March 4, 1903, was to transfer the mortgages to U Shwe Pe, and that the latter knew this and agreed to take over the mortgages; and that U Shwe Pe was guilty of fraud in taking absolute conveyances. He accordingly dismissed the suit. Upon appeal the learned judges (Hartnoll and Ormond JJ.) agreed with the findings as to the knowledge of U Shwe Pe and the intention of the parties, but were of opinion that as Myaing knew the nature of the instruments there was no antecedent fraud, and they pointed out that fraud at the time of, or antecedent to, the deeds of March 4, 1903, was not alleged. They held that in these circumstances the defendants were precluded by the Full Bench ruling already referred to from showing that the deeds of March 4, 1903, were not absolute conveyances. They accordingly allowed the appeal and made a decree for possession. 1917. June 26, 28. Sir Erie Richards, K.C., and F. J. Coltman, for the appellants. It is now established by concurrent findings that the conveyances were taken with the knowledge that Myaing was the owner of the property. Under those circumstances the former decision of the Board in this case is conclusive that s. 92 does not apply and that the evidence was admissible. (( 1911) L. R. 38 Ind. Ap. 146, 153, 154) The appellants have acquired the equity of redemption, and they stand in the position of Myaing. [Reference was also made to Rajcoomar Koondoo v. Macqueen (( 1872) L. R. Supp. Ind. Ap. 40.) and Indian Evidence Act, 1872, s. 99.] If, however, s. 92 applies, it does not shut out evidence of the surrounding circumstances and of the conduct of the parties, from which the true nature of the transaction can be inferred Baksu Lakshman v. Govinda Kanji (I. L. R. 4 Bomb. Ind. Ap. 40.) and Indian Evidence Act, 1872, s. 99.] If, however, s. 92 applies, it does not shut out evidence of the surrounding circumstances and of the conduct of the parties, from which the true nature of the transaction can be inferred Baksu Lakshman v. Govinda Kanji (I. L. R. 4 Bomb. 594.), and the further Indian decisions mentioned at p. 242 of their Lordships judgment. The decisions to the contrary in India and Burma proceeded upon a misconception of the decision of the Board in Balkishen Das v. Legge (( 1899) L. R. 27 Ind. Ap. 58.) and are erroneous. De Gruyther, K.C., and T. E. Foster, for the respondents. The decisions in India that evidence is admissible to prove that an absolute conveyance was intended to operate as a mortgage were based upon the English principle of equity laid down in Lincoln v. Wright. (( 1859) 4 De G. & J. 16.) The Board held in Balkishen Das v. Legge (2) that s. 92 excludes the application of that principle in India. The decisions in Achutaramaraju v. Subbaraju (( 1901) I. L. R. 25 Madr. 7.), Maung Bin v. Ma Hlaing (3 Lower Burma Rulings, 100.), and Dattoovalad Totaram v. Chandra Totaram (I. L. R. 30 Bomb. 119.) were right. If the conveyances are to be treated as mortgages, an agreement to that effect must be proved ; by the Transfer of Property Act, 1884 ss. 54 and 59, that agreement must be in writing, and by the Registration Act, 1877, ss. 17 and 49, it must be registered. The Board in its previous judgment (L. R. 38 Ind. Ap. 146, 153.) considered that the evidence would be admissible only if a case of antecedent fraud were made. Both Courts in Burma negatived antecedent fraud. If the appellants succeed the respondents may have no mortgage which they can enforce. Sir Erle Richards, K.C., replied. July 26. The judgment of their Lordships was delivered by LORD SHAW OF DUNFERMLINE. This is an appeal originally brought by the defendants Maung Kyin, since deceased, and Maung Kyaw from a judgment and decree of the Chief Court of Lower Burma in its Civil Appellate Jurisdiction, dated August 3, 1914, reversing the judgment and decree of the Chief Court in its Civil Original Jurisdiction, dated June 17, 1912. This is an appeal originally brought by the defendants Maung Kyin, since deceased, and Maung Kyaw from a judgment and decree of the Chief Court of Lower Burma in its Civil Appellate Jurisdiction, dated August 3, 1914, reversing the judgment and decree of the Chief Court in its Civil Original Jurisdiction, dated June 17, 1912. The matters in suit between the parties have, on a former occasion, formed the subject of an appeal to this Board. The judgment upon that appeal was pronounced on July 11, 1911, and is reported at L R. 38 Ind. Ap. 146. The meaning and effect of that judgment will be presently referred to. The property which is the subject of the appeal consists of four different parcels of land situated in Kemmendine, a suburb of Rangoon. The facts of the case may be briefly stated thus The owner of these plots of land was one Ko Shwe Myaing. On November 30, 1901, Myaing, having borrowed from Maung Kyin and Ma Ngwe Zan, his wife, Rs.8500, to bear interest at 1.8 per cent, per month, granted an out-and-out conveyance of two of these pro perties, which may be called A and B, in favour of Kyin and his wife. No possession passed ; interest was paid by Myaing, and repayment of the loan to the extent of Rs.3500 was also made. This left an unpaid balance of Rs.5000. On March 4, 1903, Kyin and his wife obtained payment of this sum from U Shwe Pe and his wife, and conveyed the properties A and B to the latter. There were two other plots of land, which may be called C and D. Kyin and his wife on February 13, 1902, having advanced Rs.11,5 5, purchased these properties, which then also belonged to Myaing, by public auction. No possession passed. On March 4, 1903, Kyin and his wife transferred these properties to U Shwe Pe and his wife in consideration of a payment of Rs.1 1,000, Rs.565 having in the meantime been paid by Myaing. The state of matters accordingly was that on the date last mentioned, namely, March 4, 1903, U Shwe Pe and his wife ecame by ex facie absolute conveyances from Kyin and his wife vested in all the properties in suit. The state of matters accordingly was that on the date last mentioned, namely, March 4, 1903, U Shwe Pe and his wife ecame by ex facie absolute conveyances from Kyin and his wife vested in all the properties in suit. Myaing was no party to these later transactions, but there is some correspondence showing that his part in the transaction was that he was desirous of having, and he obtained the benefit of, a reduction in the rate of interest from 1.8 per cent, per month to 1 per cent. Then on November 20, 1905, Myaing conveyed to the Kyins his equity of redemption. The footing upon which this deed was granted was manifestly that Myaing, notwithstanding the absolute conveyances, still considered himself as only having granted mortgages over his property, and having therefore an equity of redemption thereon, which he was free to dispose of. U Shwe Pe having died, his widow and children brought this suit for possession of the lands, it being directed against Kyin and his wife. They resist possession being given, and maintain in substance that, although the conveyances to U Shwe Pe and his wife bear to be absolute in form, it was well known to them that the true nature of the transaction was one of mortgage upon the security of the properties. In particular, it is maintained that U Shwe Pe and his wife knew that Kyin and his wife, who purported to grant the conveyance in absolute terms, were not in fact the owners of the property, but themselves only lenders thereon. This is an important consideration, as will afterwards appear, because it amounts to this, that the transfer, although ex facie of the deeds absolute in form, was in truth and to the knowledge of both parties a transfer a non domino. The dominus was Myaing, who was not a grantor. In short, the Kyins were purporting to sell and the Shwe Pes purporting to buy what both the nominal sellers and buyers knew to belong to somebody else. When the matters in dispute were before this Board upon a former occasion it was decided that evidence upon the topics above mentioned could be received, but no final judgment was given as to the effect to be given to such evidence after its reception. When the matters in dispute were before this Board upon a former occasion it was decided that evidence upon the topics above mentioned could be received, but no final judgment was given as to the effect to be given to such evidence after its reception. The proof having been taken, their Lordships are now in possession of the facts and of concurrent findings upon the most important of these. It may be well to note how this stands. The learned judge of the Chief Court (Original Civil Jurisdiction) puts the matter thus " The evidence in my opinion taken as a whole, coupled with the conduct of the parties, shows that Myaing and defendant meant their dealings resulting in exhibits C and D " (the conveyances to Maung Kyin and his wife) " to be mortgages. It is clear that Myaings object in the negotiations, which resulted in exhibits A and B " (the conveyances to U Shwe Pe and his wife), " was to transfer defendants mortgage to his relative U Shwe Pe at a lower rate of interest, and U Shwe Pes letters show he knew this and agreed to take over a mortgage. If he deliberately got deeds of sale executed, it was a gross fraud on Myaing, and the evidence is admissible to show this. He now endeavours to profit by his fraud or has since determined to try and get the property by taking advantage of the old Burmese custom of taking a sale deed where a mortgage only was contemplated. He cannot profit by this fraud. I therefore hold that defendants were mortgagees only and that U Shwe Pe had notice of the fact." Upon appeal in the Chief Court (Civil Appeal) the learned judges held "If, however, evidence is admissible for the purpose of showing what was the real transaction the facts (apart from the evidence which has been admitted under section 33 of the Evidence Act) would clearly show that the parties concerned, viz. Myaing, defendant Maung Kyin and U Shwe Pe, all intended that U Shwe Pe and his wife should take a transfer of the defendants mortgages in the form of outright sales." Upon the non-admissibility of the evidence reliance is placed by the respondents upon s. 92 of the Indian Evidence Act of 1872. Myaing, defendant Maung Kyin and U Shwe Pe, all intended that U Shwe Pe and his wife should take a transfer of the defendants mortgages in the form of outright sales." Upon the non-admissibility of the evidence reliance is placed by the respondents upon s. 92 of the Indian Evidence Act of 1872. It provides that when the terms of a contract, grant, or disposition are reduced to writing " no evidence of any oral agreement or state-ment shall be admitted as between the parties to any such instrument or their representatives in interest for the purpose of contradicting, varying, adding to or subtracting from its terms." The first proviso is to the effect that " any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud . . . ., want or failure of consideration, or mistake in fact or law." Founding upon this section, the respondents maintain that the whole of the evidence led must be rejected. On the contrary, the appellants maintain that, notwithstanding the terms of the section, they are entitled to set up and prove the acts and conduct of the parties as inconsistent with the transfer of property and only consistent with the true nature of the transaction having been one of mortgage or transfer of mortgage. They found upon a con siderable body of authority to that effect, the cases cited being Baksu Lakshman v. Govinda Kanji (I. L. R. 4 Bomb. 594.), Hem Chunder Soor v. Kally Churn Das (( 1883) I. L. R. 9 Calc. 528.), Rakken v. Alagappudayan (( 1892) I. L. R. 16 Madr. ,80.), Preonath Shaha v. Madhu Sudan Bhuiya (( 1898) I. L. R. 25 Calc. 603.), Khankar Abdur Rahman v. Ali Hafez (( 1900) I. L. R. 28 Calc. 256.), and Mahomed Ali Hossein v. Nazar Ali. (( 1900) I. L. R. 28 Calc. 289.) The judgment of Melville J. in the first of these cases is repeatedly founded upon in the course of the series, in which that learned judge expressly followed the English equity doctrine as expressed in Lincoln v. Wright (4 De G. & J. 16.) by Turner L.J. thus " The principle of the Court is that the Statute of Frauds was not made to cover fraud. If the real agreement in this case was that as between plaintiff and Wright, the transaction should be a mortgage transaction, it is, in the eye of this Court, fraud to insist on the conveyance as being absolute, and parol evidence must be admissible to prove the fraud." In the opinion of their Lordships, this series of cases definitely ceased to be of binding authority after the judgment of this Board pronounced by Lord Davey in the case of Balkishen Das v. Legge. (L. R. 27 Ind. Ap. 58.) It was there held that oral evidence was not admissible for the purpose of ascertaining the intention of parties to written documents. Lord Davey cites s. 92 of the Indian Evidence Act, and adds " The cases in the English Court of Chancery which were referred to by the learned judges in the High Court have not, in the opinion of their Lordships, any application to the law of India as laid down in the Acts of the Indian Legislature. The case must therefore be decided on a consideration of the contents of the documents themselves, with such extrinsic evidence of surrounding circumstances as may be required to show in what manner the language of the document is related to existing facts." Notwithstanding the decision of this Board however, a certain conflict of authority on the subject still remains in India. But the respondents rightly refer to Achutaramaraju v. Subbaraju (I. L. R. 25 Madr. 7.), Maung Bin v. Ma Hlaing (3 Lower Burma Rulings, 100.), and Dattoovalad Totaram v. Chandra Totaram (I. L. R. 30 Bomb. 119.), and in particular to the judgment of Jenkins C.J. in the last case. In these the judgment of the Board, as pronounced by Lord Davey, has been rightly followed and applied. The principles of equity, which are universal, forbid a person to deal with an estate which he knows that he holds in security as if he held it in property. But to apply the principles you must be placed in possession of the facts, and facts must be proved according to the law of evidence prevailing in the particular jurisdiction. In England the laws of evidence, for the reasons set forth in Lincoln v. Wright (4DeG. But to apply the principles you must be placed in possession of the facts, and facts must be proved according to the law of evidence prevailing in the particular jurisdiction. In England the laws of evidence, for the reasons set forth in Lincoln v. Wright (4DeG. & J. 16.), and other cases, permit such facts to be established by a proof at large, the general view being that, unless this were done, the Statute of Frauds would be used as a protection or vehicle for frauds. But in India the matter of evidence is regulated by s. 92 of the Indian Evidence Act, and it accordingly remains to be asked, what is the evidence which under that statute may be competently adduced ? The language of the section in terms applies, and applies alone, " as between the parties to any such instrument or their representatives in interest." Wherever, accordingly, evidence is tendered as to a transaction with a third party, it is not governed by the section or by the rule of evidence which it contains, and in such a case, accordingly, the ordinary rules of equity and good conscience come into play unhampered by the statutory restrictions. Their Lordships view the case, accordingly, as having been dealt with on that footing by their predecessors at the Board. Thus, while in the course of the judgment of Lord Robson reference was made to evidence which might be taken " relating to the acts and conduct of the parties as distinguished from oral evidence and conversations constituting in themselves some agreement between them," nothing was decided upon that head, except that it would give rise to important and difficult questions under the Indian Evidence Act. That question has now been settled by their Lordships adversely to the reception of the evidence. But the later passage of the judgment of Lord Robson is upon a topic much more crucial to the situation which the facts proved in the case admittedly disclose " Their Lordships," said he, " however, are of opinion that the case for the appellants disclosed a charge of fraud against the respondents in relation to matters antecedent to those deeds, on which much of the evidence tendered would certainly be material. Thus it is said that the respondents, or the persons under whom they claim, took absolute conveyances of property from the appellants with notice that they in fact belonged to a third person, namely, the alleged mortgagor, Ko Shwe Myaing. If this be so, section 92 of the Indian Evidence Act, even if construed according to the respondents contention, will not avail them. It is applicable to an instrument as between the parties to any such instrument or their representatives in interest, but it does not prevent proof of a fraudulent dealing with a third persons property, or proof of notice that the property purporting to be absolutely conveyed in fact belonged to a third person who was not a party to the conveyance." (L.R. 38 Ind. Ap. 146, 153.) Upon the facts it now turns out quite plainly, and it was indeed admitted in argument, that when Shwe Pe took the conveyance from the Kyins he knew that it was a conveyance of property which belonged to Myaing, and that accordingly the grant proceeded a non domino. If s. 92 applied, proviso 1 would seem to be in point, because it would be a fraud to insist upon a claim to property arising under such a transaction, the claimant knowing that the true owner had never parted with it. But, in the opinion of their Lordships, s. 92 does not apply, because the evidence, the admissibility of which is in question, is evidence going to show what were the rights of a third person, namely, Myaing, in the property; and there are concurrent findings to the effect that the property was in that owner and not in the Kyins, who to the knowledge of Shwe Pe never purported to dispose of it as theirs. If a purchaser for onerous consideration and without notice had been the grantee under a deed of absolute conveyance, a totally different set of considerations would have arisen. In the present case, however, both grantor and grantee were dealing with the property of an owner who was a third person, who was not, in the language of the statute, either a party to the instrument or a representative in interest of a party to the instrument. The evidence led as to that third partys rights is admissible, and if admissible, is most relevant. The evidence led as to that third partys rights is admissible, and if admissible, is most relevant. Their Lordships do not hold any doubt upon the subject of fact, in that respect entirely agreeing with all the Courts below. It is true that the Court of Appeal felt precluded by the terms of s. 92 of the Evidence Act from agreeing with the judge of the Chief Court, but in the opinion of the Board the section is, in the important particular last dealt with, no bar to the admission of the light on the true situation of the case. Their Lordships will accordingly humbly advise His Majesty that the appeal be allowed, the decree of the Chief Court in its appellate jurisdiction, dated August 3, 1914, set aside with costs, and the decree of the Chief Court in its original jurisdiction restored. The respondents will pay the costs of the appeal.