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Present: De Sampayo A.C.J. and Garvin A.J.
UKKU BANDA v. KARUPAI et al.
404—D. C. Kurunegala, 8,301.
Estoppel by conduct—Puisne incumbrancer not bound by decree againstmortgagor present at execution sale—Is he estopped from assertinghis title ?
To establish an estoppel by conduct by silence, the person whois sought to be estopped by reason of his silence must be proved tohave intended to create a false impression on the person who setsup the estoppel, and that he caused him thereby to do a particularact.
Where a puisne incumbrancer who was not bound by a mortgagedecree (he not having been made a party to the action or noticed)was present at the execution sale and was silent; held in thecircumstances of the case he was not estopped from asserting histitle.
'JpHE facts are set out in the judgment.
H. V. Perera(with him. Weerasinghe), for first defendant, appellant.Soertz, for plaintiff, respondent.
July 2, 1923. De Sampayo A.C.J.—
This appeal raises a question of estoppel by conduct. The seconddefendant was the owner of one-third share of Galwalagawahena.By bond dated August 2, 1911, fie mortgaged this share and twoother lands to the plaintiff. On August 22, 1917, the plaintiffsued the second defendant on this bond and on another mortgagebond of November 7, 1911, and on a promissory note. It wouldseem that the plaintiff obtained judgment for the aggregate sum dueon all three causes of action and a decree declaring the mortgagedlands bound and executable for that sum. I cannot see how themortgaged property could have been specially bound in respectof the amount due on the. promissory note. But this curiousprocedure may for the purposes of this appeal be overlooked.After this decree was entered, one Martin Perera, an auctioneer,was appointed to carry out the sale of the mortgaged property,and accordingly two of the lands, including the one-third share' ofGalwalagawahena now in question, were sold on August 3, 1918,and were purchased by the decree holder, the present plaintiff, towhom the auctioneer conveyed the lands by deed dated .March 14, –
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The first defendant claims the one-third share of Galwalagawa-hena on a deed of sale dated March 13, 1017, executed by thesecond defendant in her favour and registered on March 17, 1917.The plaintiff as mortgagee had not registered an address and hadnot followed any of the provisions in sections 343 and 344 of theCivil Procedure Code, nor had he made the first defendant a partyto the mortgage action,-or given her any kind of notice. So far asthese facts are concerned, the first defendant was not bound by themortgage decree, and the present case being a contest for titlebetween the plaintiff and the first defendant, the title of the firstdefendant must prevail. We have, however, to consider certainother facts which are said to affect her title. The considerationfor the transfer by the second defendant to the first defendant wasthe sum of Rs. 1,500, of which Rs. 35 was paid in the presence of thenotary, Rs. 400 was set off against a debt due by the seconddefendant on a promissory note, 'and the balance, Rs. 1,065, wasretained by the first defendant to pay to the plaintiff the interestdue on the mortgage. The District Judge calls this “ a bogusdeed,” which conveys no meaning to me, except, perhaps, that theDistrict Judge does not like it. The interest was not paid by thefirst defendant, and the second defendant, who is her son-in-law,was allowed to live on the land with his family. Even if the deedis “ bogus,” the title thereby passed to the first defendant, and theplaintiff was not excused from the necessity of binding her with adecree. The District Judge also thinks that the deed was executed“ to defraud creditors,” meaning by “ creditors,” no doubt, themortgagee. This is an extraordinary idea, because the'sale wason the face of the deed expressly made subject to the mortgage.Moreover, the sale to first defendant was only one of the threemortgaged lands. The fact appears to be that a suspicious at-mosphere having once been created, various adverse inferencesof the impossible kind have been drawn. These, however, werepreliminary matters, which, so far as 1 can see, do not form thebasis of the judgment. The real point of the judgment is that thefirst defendant is estopped from setting up title against the plaintiff.The first defendant is said to have been “ present at the sale ”under the mortgage decree. What this means is not very clear.The sale took place on the land, and I have no reason to doubt thatat that time she was on the land. The evidence of the arachchi isthat both defendants were living on the land, and that being so,her presence on this occasion cannot be pressed very far. Evenassuming that she was among the circle of people who w,ere attractedto the spot by the sale, it is quite certain that she was not there asa bidder, nor did she say or do anything to indicate to any personthat she had no objection to the sale. -She was in fact only silent,and it is- contended on behalf of the plaintiff that she should havemade her claim to the land publicly. Now, this class of estoppel
Ukku Bandav. Karupai
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•XJkku Bandav. Karurpai
by conduct is generally very difficult to apply. From all thedecisions on the subject, two clear propositions emerge: (1.) thatthe person who is sought to be estopped by silence must be provedto have intended to create a-false impression on the person whosets up the estoppel, and (2) that he caused him thereby to do aparticular act. I need only refer to Rodrigo v. Karunaratne1 andNandwwa v. Bhai,2 which collate all the previous decided cases.What are the facts in this case ? The first defendant's deed wasregistered within a few days of its execution. The register wasopen to inspection by the plaintiff or by any one. The deed,therefore, was not a secret document. It is impossible to say .thatthe first defendant intended by her silence to mislead the plaintiffas to the existence of the deed and to induce him to buy the land.Moreover, the first defendant is a Tamil woman, and probably withthe ordinary degree of ignorance in regard to legal or businessmatters. Did she know that her not being made a party to themortgage decree gave her an advantage over the plaintiff ? Unlessthis knowledge is attributed to her, there is no real significance inher silence on the occasion of the sale. In my opinion she cannotreasonably be supposed to have had such knowledge, and intended •by her silence to mislead the plaintiff. As regards the second of theabove propositions, there is an entire absence of evidence. Theplaintiff, who gave evidence on his own behalf, does not say a wordto the efEect that he was induced to buy, by the conduct of thefirst defendant or rather by her silence, nor does the general situationlead to any such inference. We may well believe the plaintiffthought that the second defendant was still owner of the land,but that was because the plaintiff shut his eyes to sources ofknowledge available to him, and hot because he was misled by thefirst defendant.
In my opinion the judgment of the District Judge in favour of*the plaintiff is erroneous, and I would allow the appeal and dismissthe action, with costs in both Courts.f Garvin A.J.—I agree.
i (1920) 21 N. L. R. 360.* (1922) 23 N. L. R. 449.
UKKU BANDA v. KARUPAI et al