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Present: Wood Benton C.J., Shaw J., and De Sampayo A.J.SILVA et al. v. GUNAWARDENA.
434—D. C. Negombo, 10,019.
Registration—Mortgage executed after deed of gift—Prior registration ofmortgage—Must mortgagee make donee a party to mortgage actionto get a decree binding on donee*—Civil Procedure Code,' s$. 642,64$, 644.
A gifted his land to B, and thereafter mortgaged it to C. Themortgage bond was registered before the. deed of gift. Neither Bnor C registered their address under chapter XLVI. of the CivilProcedure Code. C obtained judgment on the mortgage bondwith making B a party.
Held, that B was bound by the mortgage decree, though he wasnot a party to the action, and that the title of the purchaser a*,the execution sale held under the mortgage decree prevailed over thatof B.
Mutturamen c. Massilamany1 followed.
rjlHE facts are set out in the judgment of the Chief Justice.
Bawa, K.C., and Samarawickrema, for plaintiffs, appellants.
A. St. V. Jayewardene, for defendant, respondent.
Cur, adv. vult.
February 2, 1915. Wood Benton C.J.—
This case raises a question as to the interpretation of section 17of the Land Registration Ordinance, 1891 (No. 14 of 1891), whichhas already been frequently considered. by this Court. The com-peting instruments are a deed of donation of the land in suit infavour of tire plaintiffs, who are the children of the original owners,and a mortgage of the same land by one of the owners in favour of aGhetty. The deed of donation is dated October 14, 1895. It wasnot, however, registered till April 2, 1898. The mortage is datedOctober 24, 1895, and it was duly registered on the following day.The Chetty put the bond in suit in an action instituted on November19, 1900, and obtained a mortgage decree on March 19, 1901. Inthe execution of this decree the property was sold. It was pur-chased by Fredrick Appuhamy, who obtained a Fiscal's conveyanceon March 27, 1902, and on December 30, 1903, Fredrick Appuhamysold it to Cornelia Appuhamy, from whom it was purchased by thedefendant on November 25, 1911. Neither the plaintiffs nor the
* (1918) 16 N. L. R. 289.
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Chetty gave to the Registrar of Lands for the district in which the
WoODproperty is situated an address for service, and therefore no rights
Bsutok C,T. arise to either ride under sections 042 and 648 of the Civil ProcedureSUva v. Code, and .the legal position of the parties has to be defined withQunawar- reference to the common law and the statute law of the Colony,apart altogether from that Code. The plaintiffs were not, in fact,made parties to the mortgage action, and they contend that theyare, .therefore, not bound by the decree i$ that action. Thelearned District Judge has over-ruled this contention and dismissedthe plaintiffs' action with costs. Hence this appeal.
At the close of the argument we gave formal judgment dismissingthe appeal with costs, intimating that the reasons for this judgmentwould be delivered subsequently. The question at issue—and noother point bas been taken in support of the appeal—appears to meto be directly covered by the decision of three Judges in Muttu-ramen v. Masailamany 1 (see also James v. Carolie 2). Counsel forthe plaintiffs admitted that the mortgage in favour of the Chetty hadacquired priority by virtue of its prior registration over the deedof donation. But they argued that the effect of this priority wasmerely to give to the deed of donation a secondary place, and thatthe donees were still entitled to insist on their,right at common lawto be made parties to the mortgage action, and even, by the registra-tion of their deed in 1898 before the mortgage action was institutedto acquire a new priority- over the mortgage itself. In (he caseof Mutturamen v, Mass'damany 1 Sir Alfred Lascelles C.J. and Iin our Interlocutory judgment expressly held that an instrumentwhich acquires priority by registration pushes out of its way. everycompeting unregistered instrument of prior date for all purposes.A further question was raised’in the case as to whether the title of apurchaser at a Fiscal's sale in execution of a mortgage decree datesfrom the Fiscal's transfer or from the mortgage. We reserved thatquestion for the consideration of three Judges, as there were con-flicting decisions on the point. But on the further argument of thecase it again became necessary to deal with the character of thepriority conferred by section 17 of the Land Registration Ordinance,1891 (No. 14 of 1891), iu view of an argument, which was presentedto us by counsel for the respondent, that the priority conferred onn mortgage bond by reason of this prior registration should notdeprive the parly entitled under the instrument, postponed to thebond by virtue of such registration, of the benefit of the provisionsof section 642 and section 648 of the Civil Procedure Code. SirAlfred Lascelles rejected this argument pn two grounds, the first ofwhich was his previous ruling that the instrument which has lostthe advantage of its prior execution by reason of its subsequentregistration must be treated as non-existent as regards the instru-ment that- has gained priority by prior registration, and I expressly
* am) 16 n. l. it. m.3 am) i? n. l. b. at p. 78.
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agreed with him on the strength of my own holding to the sameeffect at the original appeal. Ennis J. formally concurred in theorder made by the Court. Mutturamen v. Massilamany 1 is, there-fore, a decision of three Judges, and as such it governs the presentcase. For it obviously makes no difference whether .the rightswhich it is proposed to except from the operations of section 17.of the Land Registration Ordinance, 1891 (No. 14 of 1891), ariseunder the Civil Procedure Code or at common law. 1 desiremerely to add that, in my opinion, the decision in Mutturamen v,
■ Ma88Uamany 1 is sound.
I agree. I think the Full Court in Mutturamen v. Massilamany 1had before it, and decided in unmistakable terms, the very pointthat arises for our decision in this case. That decision is thereforebinding on us, until it is varied by either a ruling of: the PrivyCouncil or an act of the Legislature.
De Sampayo A.J.—
The question raised in this case is whether the defendant’s title,which is traced to a Fiscal's sale in execution of a decree on a mort-gage bond dated October 24, 1895, and granted by one SamuelSilva, prevails over the plaintiff’s title, which is founded on a deedof gift dated October 14, 1895, granted to the plaintiff’s by the sameperson and his wife. The bond was registered on October 25, 1895,while the deed of gift was not registered till April 2, 1898, andconsequently the bond gained priority over the deed of gift. Butin the action on the mortgage b6nd the plaintiffs were not parties,and that being so, the plaintiffs contend that they were not boundby the mortgage decree, and that their right is unaffected by theexecution sale. Both the plaintiffs and the mortgagee failed toregister an address as provided in sections 643 and 644 of .the CivilProcedure Code, and, therefore, in regard to their respective rights,they are thrown back upon the general law. The argument for thedefendant is that the prior registration of the mortgage bond madethe deed of gift wholly void in the sense that, so far as the mortgageand all claims following from it are concerned, the gift must be^regarded an non-existent, and that consequently the plaintiffs neednot have been joined as parties to the mortgage action for thepurpose of obtaining a binding decree. If the matter were resintegra, I should Bay that this argument could not be maintained.Section 17 of the Registration Ordinance no doubt uses the word*' void, ” but its import is clearly defined and limited by the sectionitself, which immediately declares “ that nothing herein containedshall be deemed to give any greater effect or different construction
i (1973) 16 N. L. R. $89.
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***** to any deed, judgment, &o., save the priority hereby conferred onBE samfayoface of this it is to xny mind impossible to say that the
A.J. registration of the mortgage bond rendered the deed of gift “ void ”sTkxTv. *or purposes or in any other sense than that the mortgage becameGtmottw*- prior in right though subsequent in date. No doubt the indirect<feno effect of prior registration of a later deed may sometimes be to makethe prior deed of no value whatever and void in that sense. Butthat seems to me to arise, not from the operation of the Ordinance,but from the nature of the compering deeds. If both the deedscreate the same interest, as, for example, two transfers, which aremutually destructive, one deed of course voids the other. Butwhere the two deeds can subsist together, as in the case of a mortgageand a transfer, I think that the prior unregistered transfer can in noreal sense be regarded as non-existent, but that it only becomessubordinate to the mortgage. To apply this principle to thepresent case, the dominium of the property was vested in the plain-tiffs by force of the gift in their favour, and the result of thenon-registration of the deed was to make it subject to the mortgage.As in every other case of ownership subject to a mortgage, theplaintiff's position was such that I think they had a right to redeemthe mortgage, and necessarily also to have notice of any action onthe mortgage. This is, in fact, the scope and intention of the actiohypothecaria of the Roman-Dutch law against a party, other thanthe original mortgagor, whose title is subject to the mortgage.
In this connection it will be borne in mind that the provisions ofsections 643 and 644 of the Civil Procedure Code relating to noticeof the mortgage action apply only# to a subsequent transferee, andas a person whose prior deed gets behind a mortgage by reason ofnon-registration does not answer to that description, the result willbe, if the contention on the defendant's behalf is correct, that sucha person will not under any law or procedure have the right toredeem the mortgage or to be made a party to the mortgage actionfor that purpose. 1 do not think that the language of the Registra-tion Ordinance can or ought to be contrued as making such aradical alteration in our mortgage laws.
But whatever my own opinion may be on this point, I think thePull Court judgment in Mutturamen v. Massilamany 1 which isbinding upon me, has construed section 17 of .the RegistrationOrdinance in a contrary sense, and it seems to follow therefrom thatthe plaintiffs, whose deed of gift must under that ruling be regardedas non-existent for .the purpose of the mortgage action, are boundby the decree in that action, "though they were no parties to it, andthat the defendant's title, which is referrable to that decree, prevailsover that of the plaintiffs. I, therefore, agree that this appealshould be dismissed, with costs.
i (1913) 16 N. L. A. $89.
SILVA et al. v. GUNAWARDENA