( 239 )
Present Bertram C.J. and Schneider J.
MOHIDEEN v. ISEY.
52—D. C. Colombo, 2,306.
Sale by auctioneer under a mortgage decree—Purchaser gets title from dateof transfer, and not from date of sale—Civil Procedure Code,ss. 201 and 289—Convenant by a lessor to pay a sum of money tolessee in the event of his selling the property pending lease—Notapplicable to sale in execution—Claim for damages by lessee formortgaging property after lease—Liability of lessee to pay rentthough subtenants do not pay rent owing to lawful act of lessor.
A leasedbisland to B who didnotregister his lease. There*
after A mortgaged it to C, who put the bond in suit and obtainedjudgment. The property was sold by an auctioneer under themortgage decree.
Held, that the lessee (B) was bound to pay rent to the lessor (A)up to thedate of the execution ofthedeed of transfer in the
absence ofanyspecial agreement, asthepurchaser’s title does not
relate back to the date of the actual sale as in the case of a Fiscal’ssale.
The lesseeallegedthat after thenotice ofsale, hissubtenants
were disturbed in mind, and would not pay their rents.
Held, thatthisdidnot justify thelessee with holdingrent from
the lessor.'' Atenant is not dischargedfrom his legal obligations
tohislandlordby a purely lawfulact onthepartofthat
landlord,simplybecausein consequence ofthatacthisown
subtenants misconceived their own legal position.”
A covenantbythelessor to pay a- sum ofmoney tohis lessee,
in the event of his selling the property pending the lease, does notapply to a sale in execution.
The lesseehasnoright to claimdamagesfrom hislessor for
granting the mortgage (which was registered) after leasing it tothe lessor.
HE facts are set out in the judgment of the District Judge(H. A. Loos, Esq.): —
The defendant leased certain premises to. the plaintiff by the indentureof leaseNo.83 datedOctober30, 1918, fora periodof five years,com*
mencingfromOctober1, 1918,at a monthlyrental ofBs.280.
At the time of the execution of the indenture, the plaintiff paid tothe defendant a sum of Bs. 2,500 in advance as the rent for the lastnine months of the terms.
One of the covenants of the lease was to the effect that in the eventof the sale of the leased premises by the defendant during the pendencyof the lease, the defendant Bhould pay to the plaintiff the advance ofBs. 2,500 or any portion thereof that may then be due and a sum ofBs. 1,500 as damages.
( 240 )
Under writ issued in the action No. 62,821 of this Court against thedefendant in execution of a mortgage 'decree, the leased premises weresold oh January 1, 1920.
The plaintiff accordingly lost- the possession of the leased premiseson March 5, 1920, on which date the Fiscal placed the purchaser inpossession.
The plaintiff now' claims the sum of Bs. 2,500 paid by him in advance,less a sum of Ks. 950 which he admits he has received therefrom fromthe defendant, together with the sum of Es. 1,500, the damages fixedby the indenture of lease, as payable to him in the. event of a sale ofthe premises by the defendant.
As a, matter of fact the plaintiff claims from the defendant in hisprayer a sum of Its. 4,550, but there is nothing to show what the amountin excess of that referred to above represents,.
The defendant admits the execution 'of the- indenture of lease, andthat it contains the covenants referred to above.
She also admits the sale of the leased premises, but denies that theplaintiff is entitled to any damages, for the sale was not a voluntaryone, but a forced sale, and also states that the plaintiff omitted toregister the lease in his favour, which was prior in date to the mortgagebond in execution of the decree upon which the premises were sold,and that the default of the plaintiff in that respect disentitles him toclaim damages.
By way of further answer, the defendant states that in addition tothe snm of Bs. 945 which the plaintiff admits he has been paid, thedefendant is entitled to credit for-rent from December. 1919, to February,1920, amounting to Bs. 840, and to .the price of a calf and three goatssold to the plaintiff by her, viz., Bs. 100.
The defendant admits that there is a .siim of Bs. 486.98 due to theplaintiff.
The plaintiff's counsel proposed a large number of issues to severalof which the defendant's counsel objected for the reasons appearingin the record, and eventually the parties went to trial upon the followingissues, viz.:—
Is the defendantliable to refundto the . plaintiffthe advanceof
Bs. 2,500, andto paysum ofBs. 1,500 as d&dj[&£&?
What sum did the defendant repay to the plaintiff? –
Was the plaintiff not liable – to pay defendant rent ‘ for Jafiuary
and February, 1920, by r«5sbh of the aforesaid sate?
Did the defendant sell to plaintiff a calf and thtefc goats?
If so, for what amount?
Was there a salewith themeaningof the lease?•’
<7)Did the plaintifflose hisrights by reasofi of hisfLef&trtt,ifany,
in the registration of his lease?
Is the plaintiff liable to pay rent to the' defendant up to the date
of dispossession, vis., March 5, 1920, of only Up to the date ofBale?
Has the plaintiff paid rent for the month.of December, 1919?
As regards the first issue, ' Che defendant gdifrits hef * liability torefunds the amount of the advance*, lees* the sums for which she is entitledto credit.>
As regards the' ninth issue, the plaifitiff admits that .lias 'not paidrent for the month of December, 1919, but denies his liability to pay it.
( 241 )
Ah regards the second issue, the plaintiff admits that' he has receivedfrom the defendant the sums of B3. 660 and Rs. 903.02, out of theadvance of Bs. 2.600, so that according to him there in a balance sumof Rs. 1,666.98 still due out of the sum of Rs. 2,600.
I am not prepared to hold that the defendant paid the sum of Rs. 190referred to in the answer to the plaintiff on the evidence before me.
The defendant’s only witness who is her son and attorney gavesomewhat unsatisfactory evidence on that point, and ultimatelyadmitted that he had not paid that sum to the plaintiff, but that hehad asked his brother-in-law to do so, in the absence of the- evidenceof the brother-in-law, or of any document to prove the payment, Imast hold that the payment has not been proved.
lhen, too, as regards the question of the saleofa calf andthree
goats to the plaintiff by the defendant, I amnot satisfied thatthere
was any such sale.
The plaintiff states that the defendant made a present of the calfto him in consideration of his having kept a cow and calf of thedefendant on the leased premises for sometime, and he also statesthat a goat and two kids of the defendant were left with him to belooked after, that one of the kids died, and the defendant removed thegoat and the remaining kid about twelve or sixteen months ago. ,
The evidence of the plaintiff appears to me to be more probable thanthat of the defendant’s son, and I accept it in preference to' that ofthe latter.
So that I am of opinion that the defendantisnotentitled tocredit
for the sums of Rs. 160 and Rs. 100 referred tointheanswer.
The sale of the premises took place in January, 1920, so that theplaintiff was undoubtedly liable to pay the defendant the rent for themonth of December, 1919, but I do not think he was liable to pay therent for January and February, 1920, to the defendant, for the reasonthat the purchaser of the premises at the sale would have been entitledthereto, and if the plaintiff has recovered the rent for those monthslie will perhaps be called upon by the purchaser to account to himtherefor.
The main point in the case is as to whether the sale which tookplace canbe saidto be one within the meaning of the wordsofthe
lease; thewords are: “ In the event ofthesaleof this propertybythe
lessor . ..’’In my opinion what was intended thereby was
clearly avoluntarysale by the lessor,andnota forced sale.Itwas
undoubtedly not the most honest thing for the defendant to have done,to have mortgaged the premises without notice to the lessee withinless than a ijaonth of the execution of the indenture of the lease, andthen to have made default in payment which resulted in the sale of theleased property, but the words of the lease do not appear to me toindicate that anything but a voluntary sale was contemplated by thewords in question, so that the defendant is not liable to pay* the sum ofRs. 1,500 referred to in the lease as damages.
I holdthereforeon the first issuethatthedefendant is liableto
refund the balance remaining out of the advance of Rs*. 2,600, but notto pay the sum of Rs. 1,500 as damages.
On the second issue I hold that the defendant has repaid to theplaintiff only a sum of Rs. 943.02.
On the third and fourth issues I hold in favour of the plaintiff.
On the sixth issue I hold that there was not a sale within the meaningof the lease.
( 242 )
On the eighth and ninth issues I hold that the plaintiff was liableto pay rent to defendant only np to the date of sale, and not to dateof dispossession, and that the plaintiff is liable to pay the rent for themonth of December, 1919.
There is no need to deal with the fifth and seventh* issues, in viewof the above findings.
In the result the -plaintiff, is entitled to judgment for the sum ofRs. 2,500, less the snms of Rs. 943.02 and Rs. 280- (rent for December,1919), or to a sum of Rs. 1,276.98 with interest, and costs. Let decreebe entered accordingly.
E. O. P. Jayatileke (with him H. V. Perera and P. C. Fonseka)rfor appellant.
E. W. Jayawardene, for respondent.
August 1, 1922'. Bertram C.J.-—
The facts in this case are simple. The owner of the- propertyfirst of all leased it to the plaintiff. The plaintiff failed to registerthe lease. Within a month of the lease, the owner mortgaged it.Within a year of the mortgage, the mortgagee put his bond in suit,obtained execution, and had the property sold by an auctioneer.Various questions then arise between the lessee and the lessor.There ore only four points which we need consider.. The first isthis: —
When an auction sale takes place in pursuance of a mortgage,from what date is the purchaser entitled to the rent ? The answerappears to be, subject to any special condition in the conditionsof sale, from the date of the execution of the transfer. There isnothing in the Code to correspond with section 298, which wouldmake the purchaser's title relate back to the date of the actualsale. The lessee was consequently bound to pay the lessor hisrent up to that date; in the present case up to February 11, 1920.
The second point is this:—•
Can a lessee who in such a case has failed to register his deed,and is displaced owing to the prior registration of the mortgageclaim, to withhold his rent from his lessor from the moment of thenotice of the sale, on the ground that that notice so disturbed theminds of his subtenants, that he could not get them to pay theirrents to himself ? Clearly *he cannot. A tenant is not dischargedfrom his legal obligations to his landlord by a purely lawful acton the part of that landlord, simply because in consequence of thatact his own subtenants misconceived their own legal positions.
The third point is this: —
Does a covenant by the lessor to pay a sum to his lessee in theevent of his selling the property-, pending a lease, apply to a salein execution of a mortgage bond. I cannot read the words asdoing so. The sale in such a case is not a sale by the lessor, it isa sale by the Court at the instance of the mortgagee.
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The fourth and final point is this: —
Has the lessee in such a case, when he is displaced by the priorregistration of the mortgage, a right to claim damages againsthis landlord in respect of that displacement independently of thecovenant above referred to ? In my opinion lie has not. In grantiugthe mortgage the landlord has not been guilty of any breach of hisobligation to the tenant. His obligations are to put the teuantjnto possession, and to do nothing during the tenancy which wouldInterfere with his right of possession. In executing the mortgagehe did not thereby necessarily affect the tenant’s position. Themortgage was subject to the lease, and, in the absence of anyspecial action by the person interested, would ‘ not have takenpriority over the lease. The reason why it acquired priority is thatthe mortgagee was more diligent than the lessee. He was moreactive in ~the appreciation of his rights under the laws affecting theland registration. The mortgagee registered his mortgage at once,and it was this superior diligence on the part of the mortgagee thatwas the cause of the lessee’s displacement.
I have every sympathy with the appellant. I think that thelessor in executing this mortgage must have fully realized its pro-bable effect. I do not think he would have succeeded in obtainingthe mortgage, but for the fact that both he and the mortgageeknew that the lease was not registered. It is not possible, however,to prove any fraud or collusion on the part of the mortgagee, andunder the circumstances I fear that the lessee must suffer for hislack of diligence.
Under the circumstances the decree must be varied by the substi-tution of the figures Rs. 902.98 for the figures Rs. 1,276.98. Withregard to the costs, I think that the judgment should be varied, andthat in the Court below the plaintiff should get costs in the classcorresponding to the amount as to which he succeeded, that is tosay, Class 3. With regard to the costs in this Court, the variationof the judgment is so very slight that, in view of all the circumstancesof the case, each party should bear its own. costs.
Schneid-er J.—I agree.^