( 410 )
Present: Bertram G.J. and De Sampayo J.
FERNANDO et al. v. FERNANDO et al.
212—D. G. Negombo, 12,310.
Partition—Right of a Co-owner and of a Mortgagee not disclosed—Actionfor damages by mortgagee—Ordinance No. 10 of 1863, s. 9.
Where a plaintiff obtained a partition decree without disclosing themortgage rights of another person (or the rights of the mortgagor), thoughhe was aware of them—
Held, that the mortgagee was entitled to recover damages from theplaintiff.
T HE facts appear from the judgment.
A. St. V. Jayawardene, for the appellants.
Samarawichreme (with him Groos-Dabrera), for respondents.1 (1862) 2 De Q. M. <& Q. 886.2 3 Russ. 639.
( 411 )
November 5, 1918. Bertram C.J.—
This is an action under section 9 of the Partition Ordinance,in which the plaintiffs claim damages as mortgagees, on the groundthat the defendants, being fully aware of the fact that the plaintiffs’mortgagor had an interest in certain lands which were the subjectof a partition action which had been originated by the defendants,and being also aware that they, the plaintiffs, had a mortgageof this interest, fraudulently omitted to disclose both the titleof their mortgagor and the mortgage rights of the plaintiffs. Itappears that the claim which the defendants originally made inthe partition action was to half the land in dispute. They justifiedtheir claim under a transfer to them of that share by their prede-cessor in title. But there is a very strong body of evidence to showthat the land was not held in halves but in thirds, and that one ofthe persons who held one-third of the land and possessed it for avery long time was the plaintiffs’ mortgagor, who was a member ofthe same family as the defendants and claimed by inheritance.
The learned District Judge has very carefully examined thefacts, and has given a series of findings. He has nowhere expresslydeclared that the defendants were fully aware of the title of the plain-tiffs’ mortgagor, and that they omitted to disclose it through motivesof fraud. But we have got to ask ourselves what is the reasonableconclusion to draw from the findings which he has made in comingto a decision ourselves upon this point. Before I address myself tothat question, let me briefly refer to the state of the law on the point.
The law is laid down in the judgment of my Brother de Sampayo
J.in the case of Appitihamy v. Samaranayake.1 I think it is clearthat no action lies under section 9, except upon proof of the breachof a legal duty. The proviso to section 9 does not create freshremedies, but merely keeps intact such remedies as exist. If aperson claims damages under that proviso, he must show that theperson against whom he claims them had been guilty of a breachof a legal duty towards him. That legal duty may be sought foroutside the Ordinance, or it may be sought for within the fourcomers of the Ordinance'. One of the sections which may originatesuch a legal duty is section 2, which makes it incumbent upon aplaintiff, when instituting a partition action, to “ state the namesand residences of all the co-owners and mortgagees and of theirrespective shares or interests, so far as the said matters or things,or any of them, shall be known to him or them.” I think theposition must be accepted that a plaintiff is not bound to state thenames and residences of persons claiming to be co-owners whosetitle he in good faith disputes. As it is put in the case just referredto: “ I do not think that parties to a partition action will be liablein damages, if they acted bona fide in ignorance of the rights of anythird party.” The principle of that decision seems equally to apply
* (1917) 19 N. £ M. 403.
( 412 )
to claims which though known to the petitioning party, are in goodfaith repudiated.
Now, let us apply that principle to the findings of fact of thelearned District Judge in this case. He finds as a fact that Suse,the predecessor in title of Peduru, the plaintiffs’ mortgagor, wasallowed to plant up and possess a portion of the land in dispute.He finds as a fact that the second defendant was aware that Peduru’sShajre was mortgaged as claimed by the plaintiffs in this action.He further draws attention to the evidence of witnesses of greatweight, who speak to the possession of Peduru. He says that thereis no reason to doubt their evidence, and if the facts as he finds themare correct, there can be no doubt that the defendants were perfectlyaware that Peduru, the plaintiffs' mortgagor, was living on the land,had partially planted it, and claimed an interest in it. Further,there is evidence to show that there was a dispute between Peduruand the defendants about the same time as the institution of thepartition action. Very clear and explicit evidence is given on thispoint, and this evidence is nowhere explicitly or clearly contradicted.It appears from the evidence of one of the witnesses that thatparticular dispute was settled by the arrangement of a boundaryline. The dispute related to certain coconut trees. The- boundarywas put up between two rows. Sebastian, that is to say, the seconddefendant, consented to the settlement.
Now, if these are the facts, and if the mortgagor of the defendants,Peduru, did possess in the manner found by the learned DistrictJudge, I cannot myself reconcile these facts with bona fides on thepart of the defendants. They justify their action, on the groundthat their own conveyance gave them a half share, and that theycould not have made Peduru a party without acting entirely incon-sistently with their own claim. That is undoubtedly a point in thecase. 1 accept it for what it is worth. But the other points againstthem are so strong that I must conceive them as simply taking ad-vantage of that circumstance, and not relying upon it in good faith.
We have further to consider the position of Peduru. His actionis very difficult to understand, unless we find either that lie wasacting in collusion with the defendants as originally suggested in theplaint, or else that he was lulled to sleep and induced to forego hisclaim under the supposition that the matter had been settled. Itappears to me that the latter is the more probable alternative. Theevidence seems very strongly to point to the fact that there wassome sort of settlement, that Peduru imagined that the action hadbeen withdrawn, and that he had informed his mortgagee that thepartition action had been started, but that he need not trouble aboutthe matter as it was going to be settled. Taking these to be thefacts, I come to the conclusion, in the first place, that, prima facie,the plaintiffs have a cause of action under section 9, on the groundthat the defendants knowingly omitted to disclose the interests of
( 413 )
Peduru and of the plaintiffs in the partition suit. 'But it is saidthat, even accepting that position, the plaintiff has no cause ofaction, because her husband, whom, as his executrix, she represents,had notice of the partition suit. The defendants for this purposerelied upon the evidence of Peduru himself, who says:“ I told the
Annavi that a partition case bad been filed &nd had been settled,”and they cited in their support a passage from the case which I havepreviously referred to:“ Moreover* if any owner or co-owner him-
self, who is aware of the pendency of the partition action, abstainfrom coming forward, I do not know under what principle he canafterwards claim damages.” I would, however, distinguish thefacts in this case from those contemplated in those observations.Here all that the mortgagee knew in this case was that a partitionaction had been started, but that it had been settled. The.verynotification that informed him of the danger in which fie might besupposed to be placed informed him also that the danger had beenremoved. I do' not think that, under these circumstances, he canbe considered to be guilty of laches, so as to disentitle him, or anyone representing him, to the' remedy sought in the action. I would,therefore, affirm the decision of the learned District Judge, anddismiss the appeal, with costs.
With regard to the damages, the amount given by the District Judgerequires adjustment. The measure of the plaintiff's damages is thevaiue of the security of which she was deprived by the action ofthe defendants. In this case the mortgage property was more thansufficient, as is admitted by both sides, to cover the whole of themortgage debt. The measure of the damages is, therefore the amountof the mortgage debt at the time of the disappearance of the security.That the learned District Judge has estimated * at Rs. 530, andjudgment, should, therefore, be entered for the amount.
De Sampayo J.—
In Avpuhamy v. Samaranaydke 1 I ventured to discuss thevarious legal points that usually' arise for consideration in regardto the interpretation and application of the proviso to section 9 ofthe Partition Ordinance. To the authorities I referred to in myjudgment I may add Wickremasekera v. Fernando 2 and Migelv. Punchi Hamy,3 which have been cited by Mr. A. St. Y. Jaya-wardene. Practically the only new feature in this ease is that theaction is brought by or on behalf of the estate of a mortgagee. Bysection 2 of the Partition Ordinance the plaintiff is required to statein his plaint, among other particulars, the names and residences ofthe co-owners and -mortgagees. Therefore, apart _ from-the questionof the omission of Peduru, the plaintiffs' mortgagor, the plaintiffs inthe partition action would have been obliged to mention the mort-gagee himself, if, at the time of the filing of the action, they had
1 (1917)119 N. L. R. 403. 2 (189$) Matara Cases 29. 3 (1897) Matara Cases 21.
known of the' mortgage. The evidence in this case shows that thefirst and second defendants, who were plaintiffs in the partitionaction, were aware of the existence of the mortgage in favour of theplaintiffs’ tfstator. I therefore think that the first and second defen-dants can be made liable under section 9 of the Partition Ordinance.I agree with the view of the facts stated by my Lord the Chief Justice.
FERNANDO et al. v. FERNANDO et al