NAGAL.XNGAM J.—Marikar v. Marliya.
1947Present: Soertsz S.P.J. and Naglingam J.
MARIKAR, Appellant, and MARLIYA, Respondent.
S. C. 382—D. C. Matara, 15,810.
Sale in execution—-Right oj debtor to purchase his property—Purchase' in the name ofanother—Trust—Raman-Dutch Law.
There is, in the law of Ceylon, no objection to a debtor purchasing his ownproperty at a sale in execution of a decree against him.
Appeal from a judgment of the District Judge of Matara,
C. V. Ranawake, with C. Seneviratne, for the plaintiff, appellant.
N. E. Weerasooria, K.C., with M. I. M. Haniffa and M. S. Abdulla, forthe defendant, respondent.
Cur. adv. vult.
December 19, 1947. Nagamsgam J.—
The plaintiff in this case appeals from a judgment of the DistrictJudge of Matara dismissing his action for a declaration that a certainparcel of land described in the schedule to the plaint was held in trustfor him by his daughter-in-law, the defendant. The plaintiff in hispersonal capacity and as executor of the last will and testament ofMohamed Lebbe Marikkar Notaris Omer Saibu and his wife, AhmeduLebbe Marikkar Notaris Kadiga Dmma, hypothecated the propertyin dispute belonging to him personally as well as certain other propertybelonging to the estate to secure the payment of a debt due to a creditorof the estate. The creditor put the bond in suit, and under the hypo-thecary decree entered in that case, the property, the subject of thedispute, was sold inter alia and at the sale the property was knockeddown to the defendant and a conveyance was duly executed inher favour.
The District Judge has found, and his finding has not been contestedand in fact it could not have been, that the consideration for the purchasewas provided by the plaintiff and that in fact the defendant was atrustee for the plaintiff of the property. The learned Judge, however,did not see his way to grant the plaintiff the relief he claimed as he was
NAGAUHGAM J.—Marikar v. Marliya.
of opinion that the purchase by the plaintiff of the property in the nameof the defendant was either contrary to low or with a view to achievean illegal purpose.
The property in dispute was, as already stated, one that belonged tothe plaintiff personally, and relying upon two passages in Voet wherethe propositions are laid down that “ the debtor himself who has mort-gaged it (pledge) cannot do so (purch?.se) inasmuch as there can be nopurchase of one’s own property” (Voet lib. XX. tit. V.sec. 3—Berwick’sVoet page 440) and that “ no one who is prohibited from purchasingfor himself can attain the same end through the interposition of anotherperson ; for this would be a fraud on the law ’’ (Voet lib. XVIII. tit.
sec. 12—Berwick’s Voet page 17) the learned District Judge has heldthat the plaintiff could not either in his own proper person or throughthe intervention of another have made the purchase of his own propertyand therefore the purchase the benefit of which he seeks to obtain in thiscase was against the law, thus disentitling him to relief.
Voet, however, goes on to say in the first citation from which thepassage relied upon by the learned Judge has been quoted that a contraryview is held by some and refers to the opinion of Matthaeus : de auction,lib. I. cap. 10. num. 10. Berwick adds a note setting out in full atranslation of Matthaeus’ opinion, which runs as follows :—
“ Magister states that the debtor himself whose goods are sold inexecution is not to be allowed to bid, and argues from the custom ofAmsterdam. For why should he be allowed to bid who has hithertofrustrated his creditors ? Should he fool them longer ? If he has themoney to pay the price, he should rather prevent the sale by consigningthe debt due with the officer of Court. But Paponius and Rebuffusapprove the contrary opinion, and theirs seems most in accordancewith the law. For the debtor is not obscurely admitted to bid byDig. 1°. 1. fr. 52. (de act empti) and Dig. 17. 1. fr. 22. se'". 3(mandati) …
Berwick also adds :—
“ Groenewegen seems to support the view of Matthaeus (not indeedas to what was the Roman Law but) as to what is the Modem Law ;stating that the Roman Law de distractione fignorum (which respectedprivate sales) is absolete, all sales of mortgaged property being nowpublic under judicial decree and having the effect of reo judif alac.”
The reason underlying the distinction between the Roman Law and theDutch'Law as stated by Groenewegen is not only illuminating but is ofthe greatest significance to us. Under the Roman Law, which is reallywhat is set out by Voet in the passage quoted by the learned DistrictJudge, the reason for denying to the debtor the right to purchase hisproperty is that an owner cannot be the purchaser of his own property.
It may be of advantage at this stage to notice the development of the _right of a creditor to purchase the debtor’s property. Voet in the samecitation referred to above states :—
“ The creditor cannot rightly purchase the pledge (under the RomanLaw), not even by the interposition of another; for the is most frequently
NAGAUNGAM J.—Marikar v. Marliya.
himself the seller of it, and no one can buy from himself and be at oncevendor and purchaser. Plainly, if the creditor has purchased thepledge, the debtor being thevendor, it would be of pernicious examplethat the sale (thus) perfected by consent should be revoked by thedebtor, for in such a case one person is vendor and another is purchaser.
And it is the same if the Magistrate sells a judicialpledge in execution of a judgment, for as then the property is sold notby him who obtained the judgement, but by the ministry of office ofthe judge who decreed the sale, there is no reason why the creditorshould not be admitted to Did along with others, just as if he were astranger …. the consequence is that hypothecary creditorsare not now repelled from purchasing the things mortgaged, althoughthey themselves have prayed lor the 3ale .” (Berwick’s Voet pages441-442).
It would thus be seen that according to Voet himself, where the saletakes place on the orders of a Judge, the sale is not regarded as beingcarried out by the creditor, which was the ground for denying to himunder the Roman Law the right to bid. By a parity of reasoning itwould follow that where by the interposition of a decree of court thedebtor’s property is ordered to be sold, the debtor cannot be regarded,for the purpose of the sale, as continuing to be the owner of it; moreso is this the position under our law, for when a hypothecary decree isentered by court, the property is brought in custodia legis, and assumingthat the creditor has complied with other provisions of law such as thoserelating to registration, the debtor becomes incapable of dealing with theproperty, and to this extent he must be regarded as one whose title hasbeen divested ; for indeed, when a conveyance is executed in favour ofthe purchaser, it is not the debtor who executes the conveyance, but theFiscal or an auctioneer, both of whom are merely officers of court. Thereason given, therefore, by Voet, for the view taken that a debtor is notentitled to buy his own property can hardly be said to exist under ourlaw. In South Africa the view of Voet does not appear to have beenadopted. Wille on “ Mortgage and Pledge in South Africa ” (1920,page 386) states that “ it does not appear that in South Africa there isany objection to the mortgagor buying the property ”. I am of opinionthat there can be no objection under our law too to a debtor beingpermitted to buy what had been his own property.
The second ground upon which the learned Judge declined to grantthe prayer of the plaintiff is that by the plaintiff making a purchase ofhis own porperty in the name of the defendant, he put the propertybeyond the reach of his creditors and in any event the purchase hadthe effect of delaying his creditors. The property was sold publiclyand to the creditor was secured the full value in regard to it. Theproperty, therefore, cannot be said to have been put beyond the reachof the creditor. It has, however, been urged that by the plaintiff pur-chasing the property in the name of the defendant the creditor was pre-vented from following that property which would have been availableto him for excussion if the plaintiff had purchased the property in hisown name. The short answer to this is that the creditor being a mortgage
NAGAUCXGAM JMarikar v. Mariiya.
creditor could not have followed this property even if it had beenpurchased in the name of the plaintiff, till he had proceeded to executethe decree in regard to all the other properties hypothecated, and it isin evidence that there were four other properties yet remaining boundunder the decree which were available to the creditor for sale. But infact after the sale of this property, the purchase of which the plaintiffsecured to himself by making use of the name of his daughter-in-law,there yet remained only a sum of Bs. 297-47 due to the creditor, whoagreed to stay the sale of the other properties and granted to the plaintifftime to pay a smaller sum than was due to her. The plaintiff did in factpay this smaller sum in terms of the agreement, and the sales of the otherproperties were not proceeded with.
Can it be said that there was any attempt on the part of the plaintiffto defeat the claim of the creditor or even to delay her ? I do not thinkso. But it has been contended that there were other creditors whoserights were jeopardized as a result of the plaintiff making the purchase.Reference is made to two other decrees, D 10 and Dll; but these twodecrees were in favour of mortgagees who had security, and in factthe two documents D 10 and Dll show that the creditors granted timeto the plaintiff and that the plaintiff paid and settled their debts withoutrendering it necessary for them to have recourse to execution proceedings.These creditors themselves being mortgage creditors were not entitledto pursue any other property of the mortgagor till they had first excussedth e hypothecated property and they cannot be said to have been delayed.
The question has been asked as to why the plaintiff, if he did notintend to put the property beyond the ™ach of his creditors, did resortto this device of purchasing the property in the name of his daughter-in-law. The answer is provided by the plaintiff himself when he gaveevidence. He said that he was under the impression that he being thejudgment-debtor could not have purchased his own property, a positionwhich I have shown is untenable under our law. I would therefore holdthat there is no material on record from which could be deduced thatthe plaintiff in making the purchase in the name of his daughter-in-lawdid so with any ulterior motive.
At the argument, however, a further point not taken before the trialJudge was raised, namely, whether the plaintiff who was an executorcould have purchased the property ; but this proposition was argued onthe footing that the property purchased by the plaintiff was the propertyof the estate that had belonged to the deceased person, but in fact therecord shows that the property that is in dispute in this case was notproperty that belonged to the estate but was one that belonged to theplaintiff himself personally, and that explains why this point raised inappeal was never put forward before the trial Judge. In this state ofthe facts, I do not think I need discuss a question of law that is purelyacademic so far as this case is concerned.
In veiw of the conclusions I have reached, I would set aside the decreeof the District Judge and enter judgment for the plaintiff as prayed forwith costs both in this court and in the court beiow.
Soebtsz, S.P.J.—I agree.
CANEKERATNE J-—Muhandiram v. Salam.
1947Present: Jayetileke and Canekeratne JJ.
MUHANEIRAM et al., Appellants, and SALAM et al., Respondents,
S. C. 469— C. D. Kandy 1,980.
Sale—Option to repurchase—Obligation impersonal—Is it assignable ?—Place of
tender—Money desposited in proctors' office.
An agreement to resell or a right of retransfer is not personal and. can beassigned.
Where the assignee of the right of retransfer deposited the sum agreed uponwith the Proctor and requested the other party to call for it at the Proctor’soffice and exeute the retransfer—
Held, that there was a proper tender of the money.
Jl-PPEAL from a judgment of the District Judge of Kandy.
H. V. Perera, K.C. with S. R. Wijayatilake, for the plaintiffs,appellants.
H. W. Thambiah, for the defendants, respondents.
Cur. adv. vult.
December 8, 1947. Canekeratne J.—
This is an appeal by the plaintiffs from a judgment dismissing anaction for specific performance of a contract of sale.
One Abeysin Banda conveyed by deed. P1 (dated April 17,1940) to thedefendants the properties in question ; the deed reserved theright to obtain a retransfer “within three months after the expiration offive, years from this date on the payment of the sum of Rs. 350 ”. OnMay 1, 1942, Abeysin Banda for a sum of Rs. 200 executed deed P2in favour of the plaintiffs. The plaintiffs instituted this action on July31, 1945, averring that the defendants failed to execute a deed of re-transfer in their favour. The trial Judge dismissed the action on theground that the right to obtain a retransfer which was a personal rightwas not sold to the plaintiffs on P2. Mr. Thambiah argued that thedecision of the Judge on this point was correct; he also tried to supportthe order of dismissal on the ground that there was no valid tender.
It is argued that the obligation under the contract of sale, PI, wasto transfer the properties “ to Abeysin Banda and to his afore written”,that is to bis heirs, eexcutors and administrators and that it cannot betransformed into an obligation to convey the properties to strangerswith whom the defendants made no contract. But contractual rights
CANT3KERATNE J.—Muhandiram v. Salam.
are in general assignable except where the obligations of the other partyare personal in their nature. Obligations are impersonal where the lawconsiders that the personality or identity of the person in whose favourthey are to be performed is a matter of indifference to the performingparty. Where the obligation is impersonal the corresponding rightis assignable. An agreement to resell or a right of retransfer is not apersonal right and can be assigned or ceded to a stranger1. The languageused in the deed is not sufficient to show that the defendants expresslyundertook performance in favour of Abeysin Banda and his aforewrittenexclusively, and not in favour of his assignees.
By deed P2 Abeysin Banda assigned and set over unto the plaintiffs“the premises in the Schedule herto fully described ”. It is necessaryto see what the Schedule states, for the word “premises ” is used in thisdeed to show the subject of the conveyance specified in the conveyingpart. The word used in the Schedule are these:—All my right, title,interest, claim and demand in and to the following lands—then follows adescription of the properties in question. If these words are substitutedin the conveying part of the deed, it becomes clear that what the assignorintended to, and did, assign was the rights which were reserved to himin deed PI, that is the right to obtain a retransfer of the properties inquestion. This intention is also made manifest by the word used bythe assignor in describing the nature of his right—“the said premiseshave been held and possessed by me upon right reserved in transferdeed No. 6,074”.
The evidence shows clearly, and the Judge has found that the firstplaintiff met the first defendant by arrangement on July 5, 1945, andtendered the sum of Rs. 350 to him when the first defendant made anexcuse that he could not accept the money in the absence of the other-defendant, A meeting at the office of the Proctor-Notary who attesteddeed P2 appears to have been arranged for the following day for thereceipt of the money and the signing of the deed. “ The defendants ”as the Judge states “did not turn up and though letters were sent underregistered cover to both defendants by first plaintiff at first and laterthrough the Proctor, defendants ignored them”—letters sent by firstplaintiff on July 6, by the Proctor on July 9. The second defendantaccepted delivery of the letter of July 6 : the defendants appear to havedeclined to accept the other letters.
It was contended by Counsel that the plaintiffs should have tenderedthe money to the second defendant. In this connection he drew theattention of the Court, after the argument was concluded, to an obiterdictum on page 160 of 2 N. L. R. where the learned Judge stated—“Inthe second place, the money was not offered. It has been repeatedlyheld that a mere statement that money is ready is not sufficient ”. Thatdictum should be confined to the particular facts of that case. If therelation of the purchaser and vendor is that of creditor and debtor,it must be remembered that that purchaser is creditor and the vendoris debtor for delivery, the seller is, on the other hand, creditor and thebuyer debtor for the price.
1 Voet 18-3-8.
CA N'EKE KATX E J.—Muhandiram V. Salam.
If there is no agreement for postponing payment the buyer is boundto pay the purchase money immediately the contract is concluded onthe vendor’s delivery or offering to deliver the property. In the absenceof agreement to the contrary' each of the parties is bound to perform hisside of the contract immediately it is concluded. Unless otherwiseagreed delivery of the property and payment of the price are concurrentconditions : the seller must be ready and willing to give possession of theproperty to the buyer and the- buyer must be ready arid willing to payi1.The rule of the Roman-Dutch Law is almost similar to that in EnglishLaw. It is a fundamental principal that the payment of the purchasemoney and the delivery of the conveyance are to be simultaneous actsto be performed interchangeably2.
The first duty of the vendor is to deliver the property, he is bound toput tire purchaser in actual possession of the property and he is deemedto do so by giving him the means of immediately appropriating it. Theobligation of delivery-' is an obligation to deliver so as to enable thepurchaser to have and hold the property' as his own. Delivery' is eitheractually made byr the induction into possession if it be immovable pro-perty or it is constructive when some symbol of the thing sold is given asthe key of the house. The delivery or the act, or instrument of sale, wasanother species of constructive or ficta traditia3. If a place has beenagreed upon for performance it should take place there. Otherwise,as is obvious in the case of land, the proper place of performance thatis where actual delivery is sought, would be the place where the propertyis : but where, as in Ceylon, delivery of the deed is sufficient for the con-summation of a sale the proper place of performance would prima facie bethe place where the deed is executed by the party and attested by theNotary. The letter P6 dated July 6, 1945, was handed to the seconddefendant by the postal peon on July 7, and a receipt obtained for it(P8). The letter makes it clear that the sum of Rs. 350 was depositedwith the Proctor- Notary ; the defendant is requested to accept the moneyto call at the Proctor’s office, and to execute a transfer on or before July13, 1945. The defendant neither called at the office nor sent a reply.He did not at any time take up the position that the Proctor’s Office wasnot a convenient place for the execution of the deed. The appellantsdid everything they were bound to do for the purpose of obtaining atransfer of the properties.
The appeal is allowed with costs. Judgment -will entered in terms ofparagraphs (6) and (c) of the prayer. The respondents will have theright to get the sum deposited in Court on the execution of the deed.
Jayetillekr J. —I agree.
1 See passage from, Cujacius quoted on p. 326 of Norman on Sale. Cf. GrotiueIntroduction, 3—14—1 : 3—15—3.
! Palmer v. Lark (1945) 1 A. E. R. at p. 356.
* Appuhamy v. Appuhamy (1880) 3 S. C. C. 61.
Goonetilleke v. Fernando (1919) 21 N. L. R., 257, p. 265 and 22 N. L. R. 385.
MARIKAR, Appellant, and MARIYA, Respondent