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Present: De Sampayo J. and Schneider A.J,
SUPPIAH PILLAI v. RAMANATHAN.
16—D. 0. Colombo, 51,813.
Action for specific performance, or in the alternative fw damages—Propertysold by the Fiscal—Defendant adjudicated insolvent after seizure—Must assignee be the substituted defendant t
The defendant, who was in wrongful possession of a oar whichrightly belonged to plaintiff, fraudulently sold it to a third party*Held, that in the circumstances the plaintiff may maintain anaction in the alternative to obtain specific delivery or for damages.
Where a judgment-debtor is adjudicated insolvent after theproperty was seized by the Fiscal, the sale is valid even if theassignee is not substituted in place of the judgment-debtor on therecord.
HE facts are set out in the judgment of the District Judge(W. Wadsworth, Esq.):—
One Cooray, an employee of the defendant, was the owner of .a motorcar, No. 1,942. At the instance of defendant, plaintiff lent some moneyto Cooray, and at defendant’s request took a mortgage of Cooray’s caras sec* rity. The bond was executed in June, 1917.
The plaintiff put the bond in suit in case No. 49,292 of this Court andobtained judgment. In execution of his decree he seized the car atDr. Saravanamuttu’s premises. The defendant claimed the car andto.ok possession of it. The car was, however, sold in execution, andplaintiff himself bought it. The plaintiff now claims delivery of theoar, or in the Alternative claims its value and damages.
The defendant states that he bona fide purchased the car, and sometime afterwards sold it. He also relies on a point of law that the sale inexecution of plaintiff’s mortgage decree on August 23, 1918, is void, asthe defendant in case No. 49,292 was adjudicated an insolvent on August20, 1918.
Before going into the questions of law raised, I find on the facts thatthe alleged sale of the car by Cooray to defendant is a fictitious one. Iaccept plaintiff’s evidence as to the circumstances of the mortgage, andthat defendant was fully aware of all the circumstances. Cooray wasthe confidential clerk of defendant himself, and it was at defendant’sinstance plaintiff took the mortgage of the car. The car was used bothby Cooray and defendant.
I accept the letter written by Cooray marked P 1 dated November28, 1917, as setting out the true state of things as to how the car cameinto the physical possession of defendant. It was not transferred todefendant. No price was agreed upon, and defendant took the car toeffect the necessary repairs, pay defendant's claim, or rather redeem themortgage, and then to take the car to himself as his own. Till then thec^r was Cooray’s; it was in the physical occupation of defendant forCooray. Defendant appears to have given a cheque to Cooray on
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November 8, 1917, for Rs. 1,500. Defendant has not given evidence,and I am not prepared to accept Cooray’s evidence that this sum ofRs. 1,500 was given for the car, or that he gave the sum after cashing itto plaintiff. The counterfoil of the cheque is not produced, and it isstrange, if Cooray gave the whole proceeds of the cheque to plaintiff,why he did not ondorso it over to him. I reject this part of Cooray’sevidence altogether. Wherever the proceeds of the cheque went, itcertainly never went to plaintiff.
Cooray wanted the Court to believe that the letter (P 1 of November28, 1917) was written after the insolvency proceedings, and at therequest or suggestion of plaintiff. 1 reject his evidence altogether.I find the letter was written on the date shown thereon, namely, onNovember 28, 1917. Cooray appeared to be deliberately perjuringhimself in the witness boxi as to this. When pressed, however, he wasforced to admit that there was no sale.
I find that at the time of the execution of the mortgage decreeCooray was the owner of the car, and defendant knowing all the circum-stances had been acting unfairly towards plaintiff in this matter.
’ As regards the value of the car, I have no hesitation in accepting itsvalue at Rs. 4,500, as stated in Cooray*s letter. It is insured forRs. 4,000. The defendant in his answer states it was worth Rs. 2,000.It is a fact that Dr. Ratn&m bought it for Rs. 2,000. The defendantdoes not say why he sold it for this price. Sometimes a person is. notunwilling to sell a car very cheap to a medical man, who is often ofservice when he falls ill. The price paid by a doctor is no test of thereal price.
The question of law raised by counsel is that the sale in executionwas after the adjudication of insolvency by Cooray. The adjudication,as I stated above, was on August 20, and the sale in execution was onAugust 23.
Sections 56, 65, and 111 of the Insolvency Ordinance were relied onby counsel for the defendant.
In the first place, this is not a claim as between the insolvent and anycreditor. Defendant does not seek to impeach the sale as a creditor ofthe insolvent, nor does he take the objection on behalf'of any creditoror assignee. Defendant has no interest whatsoever in the property.
The property was the insolvents. It was secured to a creditor by theinsolvent long before the insolvency. The creditor sought to executehis mortgage relief, and defendant put it out of the power of plaintiff toobtain possession of the mortgaged property, fully knowing the exist-ence of the mortgage, and has appropriated the mortgaged property tohimself. He is now repelling plaintiff’s legitimate claim by saying thatthroe days before the car was actually sold in execution, Cooray, his ownservant, had gone to the Insolvency Court. However clever or in-genious the defendant's attitude in the matter, he cannot be allowed todefeat justice, and there cannot be any law which will permit him todo so.
A simple and grammatical reading of the rections quoted will showthat plaintiff’s claim on the property cannot be brought tinder any ofth$se sections. An analysis of the different sections in their purelygrammatical and simple form will show that the sections do not applyto the present case. I do not propose to analyse or to give the gram-matical position of the words used. There is no doubt in my mindthat the simple construction of the sections gives no room for defend-ant’s counsel’s objections.
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I find that the sale in execution is a valid one, and plaintiff wasentitled to the car. Defendant has made it impossible for plaintiffto reach the oar. He has sold it. Mobilia habent non sequelam applies.The defendant must pay its value.
As regards damages, there is no proof, and I award none. Enterjudgment for Rs. 4,500 and costs of suit. Plaintiff admitted defendantpaid him Rs. 500, but defendant has not asked for a set-off.
A. St. V. Jayawardene (with him Oanakeratne), for defendant,appellant.
H. J. C. Pereira (with him E, W. Jayawardene), for plaintiff,respondent.
Cur. adv. vult.
October 12, 1920. Db Sampayo J.—
The facts from which this action has arisen may be shortlystated as follows. .One Cooray Was the owner of a motor car, andon a writing dated June 5, 1917, duly registered, he hypothecatedit to plaintiff tosecure a certain sum of money. The plaintiff onDecember 13, 1917, brought an action against Cooray to realizehis seeurity, and obtained a decree on December 14, 1917. Inexecution of that decree the motor car was seized on January 12,1918, and was sold on August 23, 1918, and purchased by theplaintiff. There is no doubt that the plaintiff became the lawfulowner of the motor car. The defendant’s case is that he purchasedthe car from Cooray on November 8,1917, and that he sold it in histurn to Dr. Ratnam in September, 1918. The District Judge hasrecorded a strong finding, the correctness of which I have no reasonto doubt, that in connection with these transactions there was fraudon the part of the defendant, that he paid no consideration toCooray for the alleged purchase, and, in fact, there was no sale tohim of the car, and that the car happened to be in defendant’spossession, not upon a sale, but on behalf of Cooray while certainrepairs were being effected. The main contention in appeal onbehalf of the defendant is that at the date of action he was notin possession of the car, and that plaintiff’s remedy wals againstDr. Ratnam, who was then in possession of the car. The DistrictJudge’s judgment, however, amounts to a finding that the defendantfraudulently got rid of the car which he knew rightly beloved tothe plaintiff. In such circumstances the law allows an action tothe true owner against the wrongdoer for damages, although hemay not be able to obtain specific delivery. This is the nature ofthe present action, and I think the learned District Judge hasrightly decided it.
The appeal should be dismissed, with costs. „
The following may be taken as admitted facts. One Cooray beingsthe owner of a motor car duly mortgaged it to the plaintiff by awriting d&ted June 6,1917. The plaintiff sued upon the said bond
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and obtained a deoree in bis favour on December If, 1917, inaction No. 49,292. The oar was seized on January 12, 1918, andsold by the Fiscal to the plaintiff on August 23,1918. The Fiscalissued a certificate of sale dated September 26, 1918, after theconfirmation of the sale by the Court. Cooiay was adjudicatedan insolvent on August 20, 1918. The defendant, alleging thatCooray had sold the oar to him on November 8, 1917, sold anddelivered it to Dr. Ratnam at the end of September, 1918, forRs. 2,000.
The plaintiff instituted this action on November 26,1918; allegingthat the defendant, acting in collusion with Cooray, wh&was thedefendant’s clerk, and falsely pretending to have purchased it fromCooray, had obtained possession of the car, and had refused todeliver it to the plaintiff on-demand on October 24, 1918, Th#plaintiff claimed the delivery of the car, or in the alternative itsvalue, Rs. 4,600.
The defendant’s answer to this claim is not straightforward. Itstates that the defendant bona fide purchased the car from Coorayand 6old it 6ome time afterwards; and that the plaint discloses nocause of action.
Three issues were framed and tried:—
“ (1) Can plaintiff maintain this action against tile defendant,inasmuch as at the date of the purchase of the car by theplaintiff the defendant in No. 49,292 was an adjudicatedinsolvent ?
“ (2) Was the sale by Cooray to the defendant a fraudulent one ?
“ (3) Is the. sale to plaintiff of the motor car valid ? ”
The learned District Judge held on all these issues in favour ofthe plaintiff, and gave him judgment for the sum of Rs. 4,600.
On appeal on behalf of the defendant (appellant) Mr. Jayawardenepressed two contentions. One of them, which Was not taken in thelower Court, nor raised even in the p etition of appeal, was this: TheDistrict Judge having held that there was no sale of the car byCooray to the defendant, the sale by the defendant to Dr. Ratnamwas ineffectual to convey title to Dr. Ratnam. The plaintiff’saction should, therefore, be against Dr. Ratnam. Ilf by thiaaontan-tion it is contended to imply that the act ion is not rightly const ituted,I am unable to uphold it. The form of the action—to recover thecar or in failure its value from the person who Was in possession andrefused to restore before action brought—is one familiar to ourCourts so far as my experience goes for the last twenty-five years.It is a form of action quite consistent with the provisions of ourCivil Procedure Code, and it has the advantage of convenience onits side. Our Code defines an action “as a proceeding for theprevention or redress of a wrong,” and cause of notion “ as thewrong for the prevention or redress of which an action may be
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brought, and includes the denial of a right, the refusal to fulfil anobligation, the negleot to perform a duty, and the infliotion of anaffirmative injury/*
The cause of action alleged here is that the defendant wrongfullyrefused to restore the car to the plaintiff after the plaintiff becamethe owner of it. Even under the Roman-Dutoh law in the actio
(Voet 6,1, 22,32.)
therefore, hold against this contention.
ItWasmezt contended that as Gooray was adjudicated an insolventon August 20, and the sale by the Fiscal was on August 23, the saleconveyed no title, as the assignee was not substituted as defendantin the action. This contention is not sound. It has been laiddown thkt by a seizure the property comes into the hands of thelaw, that the seizure does not abate by the death of the judgment-debtor, and that, therefore, for the purpose of selling propertywhich had been seized in the lifetime of the judgment-debtor, it isnot necessary to implead any one as a legal representative. Thisprinciple olearly applies in this case. The judgment-debtor becamecivilly dead by his being adjudicated an insolvent only after theseizure had been effected. Sections 56, 65, and 111 of the InsolventOrdinance (No. 7 of 1853) do not seem to have any application.
Lastly, it was contended that no more than Rs. 2,000 should havebeen awarded as damages, if any, as that was the price, for whichthe defendant sold to Or. Ratnam. This contention, too, I amunable to uphold. The defendant appears to have sold the car toOr. Ratnam in an endeavour to put it beyond the plaintiff’s reach.Iu doing so he has acted fraudulently. The evidence shows thatthe car in Cooray’s own valuation was worth Rs. 4,500. TheDistrict Judge, therefore, was justified in assessing the damages atRs. 4*500.
therefore, dismiss the appeal, with costs.
SUPPIAH PILLAI v. RAMANATHAN