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Present: Mr. Justice Wendt, Mr. Justice Middleton, and Mr. Justice
PEIRIS v. PEIRIS et al.
D. G., Kalutara, 3,215.
Partition suit—Addingof lessees as parties—Appraisementof lessees’
interest—Payment in money—Ordinance No. 10 of 1663, sections8, 9, 12, and IS.
Held, that the Court has power to add as parties to a partitionsuit persons holding leases from some of the co-owners of their on-divided shares.
Held, also, that it is competent for the Court, where it decrees asale underthe PartitionOrdinance,toorderthe interests ofsuch
lessees tobe appraisedseparatelyandtheamount deductedfrom
the proceeds of sale.
HIS was a partition suit. Tbe plaintiff claimed an undividedone-sixth share of the land and allotted to the defendants
the remaining five-sixths. Prior to the institution of the suit, thedefendants had leased their mining rights. in the land to theadded defendants for a term of five years. The lessees filed astatement of claim setting forth their interest in the land. TheDistrict Judge (C. B. Cumberland, Esq.,) added the lessees asdefendants in the action, and, as the land was to be sold under theprovisions of the Partition Ordinance), a partition being impracti-cable, ordered their interests to be appraised separately and theamount to be paid out of the proceeds sale and the balance to bedivided between the plaintiff and the defendants.
The plaintiff and one of the added defendants, appealed.
H. Jayewardene for the added party, appellant.—The Court hasno power to add the lessees as parties. The Partition Ordinance •does not require that they should be joined. The procedure beingpurely statutory, the Court has no power to go beyond the provisionsof the statute* On this principle it has been held that damagescannot be awarded in a partition suit. Even if the Court has powerto add the lessees as parties, it has no power to deal with theirrights. Section 13 provides that when a partition takes place itshould be subject to all leases. Similarly, under section 8 of theOrdinance, a sale is subject to all mortgages, charges, and incum-brances. It is submitted that a. lease is a charge or an incumbrance.[Middleton J.—Do not the words “ charge or incumbrance ”mean something in the nature of security ?] The words are large
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1S06. enough to include any burden on the land Buch as a lease.* If thereJuly 24. jB n0 express provision in the Partition Ordinance, the rale of thecommon law should apply that a lease goes before a sale. It wouldbe inequitable to allow the owners to execute a lease, and thendeprive the lessees of the benefits accruing therefrom by institutinga partition suit. The land being a mining land, it would be verydifficult even to approximately value the interests of the lessees.
H. J. C. Pereira (Schneider with him), for the plaintiff, respondent.—Apart from the provisions of the Partition Ordinance the Courthas power under section 18 oif the Civil Procedure Code to add allparties whose presence may be necessary for the final adjudi-cation 6f the matter in litigation. Lessees are persons interestedin the land, and the Court haB inherent power to make them parties.The words “ other charges or incumbrances ” do not include leases.They must be taken to be ejusdem generis with mortgages. Evenif they do include leases, they must be leases of the entire property.To hold that the Court has no power to deal with the rights of lesseeswould be to render nugatory the provisions of the Ordiuance,and to make a sale under the Ordinance an impossibility. Someof the co-owners cannot by giving a lease of their shares deprivethe other co-owners of their undoubted right to demand a partitionor sale of the common property. A certificate of sale under thePartition Ordinance gives a conclusive and clear title to the pur-chaser; otherwise it would be difficult to find a purchaser for theproperty. The result would be that the lessees and the purchaserwould be owners in common, and the proceedings under the PartitionOrdinance would be absolutely useless. The principle contendedfor by the appellants, viz., that lease goes before sale is not infringedby such an order as the District Judge has made. The lesseeshave to be paid the appraised value of their interests first, andthe balance is to be divided among the co-owners. This orderpractically recognizes the preferent right of the lessees. A similarorder was made in D. C., Batnapura, 910 (1) by the District Judge,and that order was affirmed by the Supreme Court.
H. J aye war dene, in reply.
Cur. adv. vult.
24th July, 1906. Wendt J.—
This is a partition action in which the plaintiff has been rightlydeclared entitled to one-sixth of the land, and each of the first,second, third, fourth, and sixth defendants to one-sixth thereof. 1
(1) 5. C. Min. May 7, 1903.
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The two added defendants hold a lease from the defendants oftheir undivided five-sixths of the land for a term of five years,commencing from 21st November, 1905, for the purpose of miningfor plumbago, the lessees yielding to the lessors a share of theplumbago won by way of ground rent. The land being of verysmall extent and chiefly valuable as plumbago, land, the ownersare agreed .that a sale was properly ordered in lieu of a partition.The present appeal arises out of the way in which the District Judgehas dealt with the interests of the lessees. He has ordered that theland be sold free of the lease, that the lease be valued and its valuepaid out of the proceeds sale to the added defendants, and that thebalance proceeds sale be divided equally among the plaintiff andthe original defendants. There is an obvious mistake here, inas-much as plaintiff’s share is made to contribute to the amount payableto the lessees as though that share were also subject to the lease. Theproper order would have been that plaintiff should receive one-sixth of the proceeds sale and that the value of the lease should bededucted from the remaining five-sixths belonging to the defendants,and the balance prooeeds divided equally amongst the defendants.
Appellant (who is one of the two lessees) objected that he waswrongly made a party to the action. I cannot agree with him.No doubt section 2 of the Partition Ordinance, in specifying certainthings which the plaintiff shall state in his libel—amongst themthe names of co-owners and mortgagees—does not mention lessees;but very clearly a lessee of an undivided share is a person whoseinterest may be seriously prejudiced by his lessor colluding with theother shareholders. For instance, the lessor may agree to a smallershare being allotted him than he has demised by the lease, orhe may without objection accept his portion out of the uncultivatedor barren part of the land, and the consequence from the enactmentin section 13 would be that the lessee would have Ins rights confinedto that portion. I therefore think it was prudent and right to bringthe lessees in as parties.
But the main ground of appeal involves a different question—a question whjch it was thought desirable a Full Bench shouldconsider, viz., whether the Court had jurisdiction to expropriatethe lessees and compel them to accept a money compensation forthe loss of their leasehold-rights. The lessees deny that jurisdiction,and say that the Court should not have concerned itself about thelease at all, but simply ordered a sale, the consequence of whichwould have been (they say) that five-sixths of the land would bylaw have continued subject to their lease. Obviously this is not adesirable result; the purchaser at the sale would in effect continue
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1906. a co-owner with the lessees in spite of the proceedings, under theJuly 24. Ordinance to put an end to the common ownership. But if theWsirsT J. Ordinance edtails such a result, of course we cannot alter the law.
Section 18 deals expressly with leases, and in effect enacts thatafter a partition has been effected a lease of an undivided share shallapply exclusively to the portion allotted in severalty to the lessor.Nothing is Baid as to the consequence of a sale instead of a partition;nor is the section prefaced by the declaration which in section 12 intro-duces a similar provision in respect of mortgage, viz., that “ nothingin the Ordinance contained shall affect the right of any mortgageeof the land.” Unless, therefore, the land when sold carries withit its burden of the lease, such sale would extinguish the lessee’srights, and it would therefore follow that the Court should providefor the lessee receiving compensation out of the proceeds sale.
But appellant’s counsel argued that the terms “ mortgage,charge, or incumbrance,” to which the sale was made subject bysection 8, included a. lease. I cannot however assent to that argu-ment. These terms import a mere security, and are not apt fordescribing a lease. I therefore consider that a sale under thePartition Ordinance would wipe out a lease which was not saved bysection 13. Section 12 saves all mortgages from the operation ofthe Ordinance, whether a partition be ordered or a sale, and makesspecial provision as to mortgages of undivided shares. Section 12does not similarly save all leases, but it makes special provisionfor leases in cases of. partition only. The result is that in cases ofsale leases are not specially provided for, and the effect of section 9is to give the purchaser a title free of them.
The maxim that hire goes before sale is not violated by so holding.It means that an owner cannot by a sale prejudice the interestalready created by him by a prior lease. The maxim is respectedby the Court which avers that the value of the lease should be paid tothe lessee out of the price of the land demised. That the Court shouldhave tiie power to order the land to be sold free of the lease is onlyreasonably necessary for effectually carrying out the object of the Par-tition Ordinance, and I have no hesitation in holding that it has thatpower. I agree with my brothers that the appeal should be dismissedwith costs subject, to the modification I have already'mentioned.
The question really in this case, a partition action, was whetherthe Court was entitled to order a lease upon land which it wasempowered to sell under the Partition Ordinance to be cancelledand valued and the proceeds paid to the lessees.
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The plaintiff as an owner of one-sixth of a certain plumbagoland sued his five brothers and sisters as owners of five-sixths forpartition. The five defendants hadr leased their shares to the twoadded defendants for plumbago mining purposes for five years,and the District Judge ordered that the land,-which was too smallfor partition, being only 1 acre and 28 perches in extent, should besold free of the lease, that the lease should be appraised separatelyand its value deducted from the purchase money and paid to theadded defendants and the balance distributed between the plaintiffand defendants.
One of the added defendants only appealed. -In the PartitionOrdinance there is apparently no provision for such a case as this,and it was objected that the Court had no power to expropriatethe interest of the lessees in the way proposed.
In my opinion it was right and convenient, though not orderedby the Ordinance, to join the added defendants as parties to thepartition suit, considering their, interest under the lease and theconclusive results of a formal partition decree.
At the same time I was much impressed by the argument forthe respondent that any person knowingly leasing from some onlyof the co-owners of property must be taken to be cognizant of thefact that the other co-owners have a right to obtain partition,and that the land may possibly be ordered to be sold for that purpose.
Even in the case of a sale the purchasers from co-owners couldnot resist a claim for partition from the other co-owners.
If also, as was argued for the respondents, the Court were to actin the manner suggested by the learned counsel for the appellantand sell the land subject to the early lease, the result would in effectbe the nullification of the Partition Ordinance, as the purchaser,who might be the plaintiff, would buy subject to a lease of five-sixthsby his late co-owners to the added defendants, and the same conditionof things in a somewhat different form would arise. The fact thata lease by some of the co-owners has not, in the case of a sale underthe Ordinance, been considered therein by the Legislature ratherleads to the inference that the interests of such lessees were intendedonly to be safeguarded by compensation under section 9.
If by any chance such lessees got no notice of a partition, thefinal decree under section 9 would, I think, deprive them of theirrights under the lease, leaving them to their remedy only indamages.
If they are cited to attend proceedings on partition with a viewto the representation of their interests, and have an opportunityof doing so and an equitable order is made dealing with their
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interests, I think it ‘will not be in their mouthB to complain oi expro-priation by the Court when, if they had no notice, their rights underthe lease could be Bwept away by an order for sale under section 9.
The case quoted from the Batnapura Court (D. C., Batnapura,910, Supreme Court Minutes, 7th May, 1903), though not exactlyan authority for such action as has been adopted by the DistrictJudge here, shows that lessees have been found willing in caseslike the present to accede to an equitable arrangement for com-pensation.
In my opinion, therefore, the appeal should be dismissed and theorder of the District Judge should stand. .
Wood Benton J.—
I have had the advantage of reading the judgment of my brotherMiddleton, and I agree with his reasoning and his conclusion. Ithink that the lessees were properly joined [of. Cornish v. Gest (1)],and that, in such a case as the present, the lease must be taken tohave been entered into subject to the common law right of oneco-owner to compel a partition, with the incidental possibility ofa sale being ordered by the Court. The common law rule, referredto by Mr. Hector Jayewardene, in his argument for the appellant,as to a lease taking priority over a purchase, does not, in my view,apply to the case of a lease of an undivided share of land. I mayadd that I do not think that a lease can be brought under the words“ mortgage, ” “ charge, ” or “ incumbrance ” in section 9 of “ ThePartition Ordinance, 1863” (No. 10 of 1863), or that under existinglegislation (see sections 9, 12, 13 of No. 10 of 1863) the Court hasany power to make a decree for a sale in partition proceedingssubject to the provisions of a lease of the property sold.
(1) (1788) 2 Cost 27.
PEIRIS v. PEIRIS et al