Source: https://www.lawnet.gov.lk/1977/12/31/de-silva-v-rosinahamy-et-al/
Timestamp: 2019-04-19 07:30:06+00:00

Document:
Present : Soertsz A.C.J. and Keuneman J.
DE SILVA v. ROSINAHAMY et al.
Mortgage—Land sold under decree for sale in partition action—Whole landunder mortgage—Mortgage attaches to land in hands of purchaser—Hypothecary action against purchaser—Partition Ordinance, No. 10 of1863, s. 12.
Where property is sold under a decree for sale in a partition action,the mortgage attaches to the land or part of it both in the case of amortgage of the whole land as well as in the case of the mortgage of anundivided share.
The failure of the mortgagee to make a claim on the mortgage in thepartition action does not debar him from bringing a hypothecary actionagainst the purchaser of the land.
Gadage v. Dias (30 N. L. R. 100) followed.
Silva v. Wijeysinghe (20 N. L. R. 147) not followed.
by them in his favour, and he joined the fifth to nineteenth defendants-respondents as parties to the action in order to obtain a hypothecary decree.The fifth to nineteenth defendants had purchased the mortgaged land,when it was sold in lots under a decree for sale entered under section 4of the Partition Ordinance, subsequent to the mortgage. The learnedDistrict Judge ordered a decree against the first to fourth defendantson the money count, but dismissed the action against the fifth to nine-teenth defendants. From this order the plaintiff appeals.
H. V. Per era, K.C. (with him P. A. Senaratne), for the plaintiff, appel-lant.—The plaintiff-appellant had two mortgage bonds over this land. Inthe partition action he intervened and disclosed one of the bonds. Withregard to the other, he was under the misapprehension that it referred toanother land. The learned District Judge held that he was estoppedfrom claiming a hypothecary decree against the fifth to nineteenthdefendants. Under the Partition Ordinance there is no duty cast on amortgagee to disclose the mortgages. By sections 8 and 12 of theOrdinance the rights of mortgagees are conserved. The fact that he wasa party in the partition action would not operate as res judicata as thereis no adjudication with regard to the bond.
SOERTSZ A.C.J.—de Silva v. Rosinahamy.
had two mortgages, affecting undivided shares. He admits he disclosedone and not the other, because he thought it did not apply to this land.
The appellant need not have intervened in the action at all, because thePartition Ordinance conserves his rights ; but once he elected to intervenein the action, he was under a legal duty as a party to the action to discloseall his interests in the subject-matter of the action. See : section 34 ofCivil Procedure Code. The proceeds of the sale have been distributedamong the parties. The appellant is, therefore, estopped as against thepurchasers-respondents. See: section 115 of the Evidence Ordinance.
Further there is no proof that the bond was duly registered; and infact the appellant’s evidence suggests that it does not apply to the land inquestion.
Section 12 of the Partition Ordinance provides that the right of themortgagee shall not be affected. This means that the final decree in thecase of a partition or sale, which wipes out all pre-existing rights andwhich create a new title, is not to wipe out the rights of the mortgagee.
The words “ share in severalty allotted to the mortgagor ” clearly referto a case of partition only. They are meaningless with reference to adecree for sale. The words “ or sale ” in the proviso are an error ; in theconcluding portion of it, the word " sale ” is omitted. See Jayewardeneon Partition, p. 255.
The ruling in Godage v. Dias * should be restricted to the circumstancesof that case. Difficulties arose there as to what “ the share in severalty ”meant.
It is submitted that the decision in Fernando v. Silva’ is not correctand should not be followed.
H. V. Perera, K.C., in reply.—Section 12 of the Partition Ordinance isclear. The rights of a mortgagee are preserved whether a partition or asale is ordered. The words “ limited to the share in severalty ” apply tocases where a sale is ordered as well as to cases where a partition isdecreed.
In this case, the plaintiff sued the first to fourth defendants to recovera sum of Rs. 2,000 due on a mortgage bond executed by them in hisfavour, and he joined the fifth to the nineteenth defendants as parties tothe action in order to obtain a hypothecary decree. Those defendantshad purchased the mortgaged land, when it was sold in lots under a decreefor sale entered under section 4 of the Partition Ordinance, subsequentto the mortgage.
The fifth to the nineteenth defendants contended that (1) because theplaintiff had intervened in the partition case and had claimed certaininterests in respect of this land on another mortgage, and had failedto set up a claim on this mortgage, he was barred from making the present1 SO X. L- R- IV• 30 N. L. R. 100.3 S Ta„,byah ill.
SOER.TSZ A.CJ.—de Silva v. Rosinahamy.
that there was no proof that the mortgage bond was properlyregistered. I mention (3) and (4) because they were advanced at theargument, but I do not think they merit serious consideration. Theidentity of the land is beyond question on the pleadings themselves,and so far as proper registration is concerned I do not understand thecase for the respondents. The appellants’ deed is registered on the faceof it. But Mr. Rajapakse argues that because there was an issue “Hasthe plaintiff’s bond been properly registered ” ?, the plaintiff was boundto prove that the deed was registered in the proper folio. Now, thequestion of proper folio is a comparative or relative matter and pre-supposes the existence of at least another folio, and in the absence of anallegation by the defendants-respondents that there is some other foliowhich is the right folio, I do not see how the question arises, or how theappellant could have addressed himself to that issue.
In regard to the plea that the plaintiff is barred from setting up hispresent claim on the ground that he had failed to assert it when heintervened in the partition case and set up his other mortgage, theplaintiff’s evidence is that he did not claim on this mortgage becausehe was under the impression that this mortgage did not affect the landsought to be partitioned. He was under a misapprehension as to theidentity of the land sought to be partitioned in that case. But quiteapart from this evidence on the point, I fail to see how it can be said thatthe matter was res judicata or that the plaintiff was estopped by virtue ofsection 115 of the Evidence Ordinance, as it was argudd, he was.
For one thing, there was no adjudication on th*^ question of thismortgage uponcjwhich a plea of res judicata could be based, and in regardto the argument that there was, in effect, a bar similar to the bar ofres judicata because the plaintiff could have asserted his claim on thismortgage in the partition case and could have had the partition declaredsubject to the mortgage, the answer appears to be that he was under nolegal obligation to set up the mortgage in the partition case. The effectof sections 8 and 12 of the Partition Ordinance is to conserve the mortgage,may be in a modified form, whether it had been set up or not. The factthat one mortgage was set up makes no difference as far as I can see.It might have been different if this mortgage had been asserted inthe partition case and an adjudication obtained upon it, that was adverseto the plaintiff.
1 20 X. L. <?. 147.
the land bound and executable and urges that the mortgagee must lookfor payment from the price paid by the purchaser at the sale under theOrdinance, for, that, by that sale, he urged, he acquired the land freefrom incumbrance. I am of opinion that this plea cannot be sustained.The 12th section of the Partition Ordinance expressly provides thatnothing in the Ordinance shall affect the right of any mortgagee, and Ican see no good reason why the same share of the land mortgaged shouldnot be sold in satisfaction of the mortgage This case although citedin the course of the argument in the case before Wood Renton C.J. andde Sampayo J. has not been noticed in the course of their judgments.
That being so, the very fact that the proviso in this section deals withthe position of mortgagees of undivided shares shows conclusively thatthe rule itself covers any mortgagee of the land ”.
mortgaged ’ or ‘ the share of the land ’ Dalton J. added “ these wordsI assume are intended to be an interpretation of the words “ the sharein severalty allotted to the mortgagor ”.
An examination of section 12 of the Partition Ordinance satisfies mebeyond any manner of doubt that both in the case of a mortgage of thewhole land, and in the case of a mortgage of an undivided share, on a salein the partition action, the mortgage attaches to the land or to some partof it, and not to the proceeds of the sale. I cannot discover any soundprinciple on which a discrimination such as that suggested in Silva v.Wijeysinghe (supra) can be justified. It would be to treat a mortgageeharshly indeed, to deprive him of his charge on the land and refer himto a fund which may disappear before he ever becomes aware of itsexistence. Sections 8 and 12 recognize this fact and leave mortgagessubstantially unaffected by proceedings under the Ordinance.
Mr. Rajapakse was obviously in difficulty and was driven to all sortsof expedients to support the judgment of the trial Judge and the viewtaken in Silva v. Wijeysinghe. He suggested that the words “ or sale ”in the first line of the proviso should be struck out or ignored. He citedthe comment made on page 255 of Jayewardene on The Law of Partition> 2 Tnmbynh 111.» 26 N. L. R. 433.3 30 N. h. B. 100 .
SOERTSZ A.CJ.—de Silva v. Rosinahamy.
with great care. They apply to cases in which a sale as well as to casesin which a partition is decreed. In either case, the mortgagee mustrealize his mortgage within the limits of the shares allotted in severaltyto the mortgagor or his successor. If for instance, in the event of a decreefor partition, the mortgagor or his successor has been allotted a one-fourth, and in respect of that one-fourth a definite lot is given to him,the mortgagee may sell only so much of that lot as his mortgagor hadmortgaged. If the mortgagor had mortgaged a one-fourth, and thatshare has been allotted to him in severalty, then the&apos;whole lot given tohim in respect of that one-fourth is liable to be sold ; but if the mortgagorhad mortgaged only a one-eighth share, and is allotted a one-fourth inthe decree, the mortgagee may sell up only a half of the lot allotted to themortgagor or his successor in respect of that one-fourth. If the mort-gagor had mortgaged a fourth and he or his successor was allotted onlyan eighth, the mortgagee could obtain a hypothecary decree only inrespect of the lot given to his mortgagor or his successor, in respect ofthat one-eight. For the rest, he has only a claim for money due on thebond. Similarly, in the case of a sale, the mortgagee will be able toassert against a purchaser his mortgage within the limits of the shareallotted to the mortgagor or his successor. By way of illustration again,if the mortgagor had mortgaged a fourth, and in the decree ordering a salehe or his successor was allotted a fourth, then the mortgage would attachto a fourth of the whole land in the case of a purchaser of the whole land,or to a fourth of each lot if the land had been sold in lots to differentpurchasers. The position would be the same in the other cases con-sidered by me in connectipn with a decree for partition. Difficultiessuch as arose in the case of Godage v. Dias (supra) can occur only inexceptional circumstances such as existed in that case where in view ofthe fact that the mortgagor had mortgaged an undivided half share oftwo lots of the land partitioned as well as of another land, an inquiryseemed necessary to ascertain what proportion of the whole land parti-tioned, an undivided half-share of lots 2 and 3 represented, and the casewas remitted for that purpose. But such difficulties are susceptible ofmore or less easy solution. At any rate, they cannot affect the inter-pretation of section 12.
KEUNEMAN J.—de Silva v. Rosinahamy.
discharged—sale or no sale. The first part of the proviso appears todeal with an allotment in severalty to the mortgagor himself. The secondpart of the proviso, brings within its scope the case of a successor-in-titleas well as the case of a purchaser at the partition sale, and it provides thatin each of those cases, the mortgage attaches to the share in severalty afterthe severance under section 4 till it is discharged; and that in respect ofthat share in severalty, the mortgagor is bound “ by and under the sameconditions, covenants, reservations as shall be stipulated in the mortgagebond so far as the same shall apply to a share in severalty”; and “theowner of the share in severalty so subject to mortgage shall, without a newdeed of mortgage, warrant and make good to the mortgagor the saidseveral part Examined in this way, section 12 is seen to be a completeand logical adjustment of existing mortgages’ to the scheme of theOrdinance, and I do not find in it one word too many or too few.
For these reasons, the appeal in this case is entitled to succeed. I setaside the judgment of the District Judge and direct that decree beentered as prayed for in the petition of appeal. The appellant will havecosts here and below.
Keuneman J.—The plaintiff brought this action to recover from thefirst to the fourth defendants a sum of Rs. 2,000 being principal andinterest due on mortgage bond No. 972 of November 15, 1927. Thefifth to the nineteenth defendants were joined as parties to be bound bythe hypothecary decree, which the plaintiff claimed inter alia over 5/192of the property Wela-adderawatta alias Wetakeiyagahawatta which hadbeen broken up into several blocks and sold to the fifth to the nineteenthdefendants. The sale in blocks was under a decree for sale in partitionaction D. C. Galle No. 30,989.
to this land in view of the fact that he was a defendant in thepartition case and did not disclose this mortgage bond in hisanswer ?
Has the plaintiff’s bond been properly registered ?
The learned District Judge entered judgment in favour of the plaintiffagainst the first to the fourth defendants, but held that the premises inquestion sold to the fifth to the nineteenth defendants were not subjectto the mortgage and ordered the plaintiff to pay the costs of thesedefendants. The plaintiff appeals.
present plaintiff had appeared at the sale in the partition case and pur-chased some of the properties at that sale. The District Judge appearsto have thought that these grounds constituted an estoppel.
I may say that the second ground mentioned is not in accordancewith the facts as disclosed in the evidence and appears to have been basedon a misunderstanding. All that the present plaintiff admitted was thatafter the sale in the partition case he took a mortgage of another lot ofthe land in question from the purchaser at the partition sale, and subse-quently put the bond in suit and purchased that lot himself. Theplaintiff stated that he was not present at the sale in the partition case.
As regards the first ground mentioned by the District Judge it iscertainly the case that the present plaintiff was the hundredth defendantin the partition case, and that he filed answer putting forward a claimbased upon the bond No. 32,625 above mentioned, and did not claimunder the bond now sued upon. The plaintiff has offered an explanationfor doing so, but in any event is he precluded from suing on the bond nowin question ?
It was not contended before us that section 34 of the Civil ProcedureCode had any application to the present case, and I do not think that■section applied here. No doubt it was open to the present plaintiff orto the other parties to that partition action to raise the question whetherthe present bond had any effect or not and had such questions beenraised and decided, the matter may have been res judicata. I do notthink, however, there was any obligation on the part of the presentplaintiff to claim upon the bond now in question. Now under section 8of the Partition Ordinance, the Commissioner for sale is required to putthe premises up for sale “ subject to any mortgage or other charges orincumbrances which may be on the same ”, and section 12 provides that“ nothing in this Ordinance contained shall affect the right of any mort-gagee of the land which is the subject of the partition of sale ”. I thinkit follows from these sections that any mortgage, which has not beenexcluded in consequence of a finding in the partition case, must beregarded as having force and effect in spite of the partition or sale.
The further argument was addressed to us that in any event themortgage now in question must be regarded as binding upon the proceedsof sale and not upon the property in the hands of the purchasers. It istrue that the decision of this court are not all in accord. I am, however,with respect in agreement with the decisions in Abdul Hamidu v. Perera&apos;and Godage v. Dias‘ that section 12 protects not only mortgages of thewhole land but also mortgages of undivided interest in the land. Thereis no need to repeat the arguments in those cases. The real difficultyappears to arise in the application of the proviso, namely, “if ….
• 20 -V. L. F. 433.1 30 N. L. R. 100.
suggestion- of the Acting Chief Justice that in the case of a sale thesewords may be applied to the share allotted to the mortgagor under thepreliminary decree. It is to be noted that under section 4 if the defendantsmake default, the Court will inquire into the extent of the “ respectiveshares and interests ”, and when the defendants appear and raise disputes,the Court will inquire into their “ several shares and interests“ Several ” is not used here in the sense of “ divided It is also the casethat although the provision to section 12 uses the words “ undividedshare” in connection with the mortgage, it limits the mortgagee to theshare in severalty ” allotted to the mortgage. If the mortgagee isto be restricted to a “ divided share ”, it would be natural to use theword “ divided ” and not “ in severalty ”. Further, when the dividedshare is specifically referred to in the last words of the proviso it isdescribed as “ the several part ”. The distinction between “ severalshare ” and “ several part ” is significant. I think therefore that theshare in severalty ” may be, in the case of a sale taken to mean theshare allotted to the mortgagor in the preliminary decree under section 4,and that the mortgage is preserved by section 12 up to that extent evenas against the purchaser at the subsequent sale.
I agree with the order made by the Acting Chief Justice.

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