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PresentDe Samp^yo and Schneider JJ.SAMARANAYA^E «. DISSANAYAKE.
27—D. C. QaUe, 18,951.
Leave given to mortgage decree-holder to bid and buy property subject tocondition that he was not to bid less than the appraised value—Purchase by a third party for decree-holder at less than appraisedvalue—Action by decreerholder against purchaser for transfer—. Fraud and collusion.
Plaintiff, a mortgage decree-holder, who had obtained leave ofCourt to buy the mortgaged property at the sale under his decree,subject to the condition that he was not to bid less than theappraised value, arranged with the defendant to bid for him. Thedefendant purchased the property at less than the appraised valuewith .plaintiffs money. Plaintiff sued defendant for a transfer ofthe property.
Held, that plaintiff was entitled to a transfer.
Evasion by a plaintiff of section 272 of the Civil Procedure Code,or of the conditions imposed by the Court with regard to his pur-chasing at a Fiscal’s sale, is a mere irregularity for which the salemay be liable to be set aside under section 282 on the applicationof the debtor, but the sale itself, when it is confirmed and a Fiscaltransfer issued, is no longer to be considered invalid.
The defendant cannot resist the plaintiff’s claim on the ground offraud and collusion.
r | 'HE facts appear from the judgment.
Samaramckreme, for plaintiff, appellant.
Soertsz, for defendant, ress&ndent.
( 384 )
June 29, 1922. De Sampayo J.—
This case involves a question c: J v, which, I think, has not beenrightly decided by the District Judge. The plaintiff was the mort-gagee of a certain land, and he obtained judgment on the mortgagein a previous case. When the property was to be sold by the Fiscalin execution of the decree, the plaintiff appears to have applied tothe Court for leave to bid and buy the property. The Court gaveleave, subject to the condition that he should not bid less than theappraised value. The plaintiff appears to ha vis arranged with thedefendant in this case to bid for him. Accordingly, the defendantbid and purchased at the sale at a prfeiess than the appraised value.The plaintiff has brought the present action alleging that the plaintiffactually paid the purchase money, and the defendant bought the pro-perty witfetua money for the plaintiff,and prays that the defendant be
-'■'"Shftfed to re-transfer the property to him. It has been held in twoprevious cases that evasion by a plaintiff of section 272 of the CivilProcedure Code, or the conditions imposed by the Court with regardto his purchasing at a Fiscal’s sale, is a mere irregularity for whichthe sale may be liable to be set aside under section 282 on the appli-cation oi the debtor, but that the sale itself, when it is confirmed anda Fiscal’s transfer issued, is no longer to be considered invalid.These cases are Silva u. Siyadoris1 and Weeraman v. De Silva? butMr. Soertsz; for the defendant, contends that there still remains aquestion of law whether it is not fraud and collusion between theplaintiff and the defendant when the property was purchased at aless price than the appraised value by the defendant on behalf ofthe plaintiff. I am myself unable to follow the argument thatthe transaction amounted to fraud. The suggestion is that theexecution-debtor was defrauded to the extent of the differencebetween the appraised value and the purchase price. The differencemay be a loss if, in fact, the appraised value is absolutely correct,but I cannot see that when a person bids and purchases at a publicsale like a Fiscal’s sale it is a fraud of this kind when he purchases ata less price than the real value of the property. Consequently, 1cannot agree that the defendant can rely on any circumstances offraud in order to resist the plaintiff’s case. If the plaintiff is ableto establish the facts which he alleges in his plaint, I think thedecision of the District Judge dismissing the action is erroneous.
I would, therefore, Set it*-Aside, and send the case back for trialon evidence in due course. The plaintiff, I think, is entitled to thecosts of the day in the District Court and of this appeal.
Schneider J.—I agree.
1 1 C. IF. B. 226.
8 (1922) 22 N. L. B. 107.
SAMARANAYAKE v. DISSANAYAKE