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Pretent : Fisher C.J. and Drieberg J.
ABDUL LEBBE v. ABIDEEN et al.
5&—D. C. (Inty.) Colombo, 19,269.
Hypothecary action—Action by creditor against purchaser of mortgagedproperty—Burden of proof.
Where a creditor on a mortgage bond asks for a hypothecarydecree against the property, title to which has passed to a thirdparty by a sunbsequent-transfer by the debtor, the burden is uponthe plaintiff to prove the execution of the mortgage, and the sumof money due upon it.
An admission by the debtor of the amount doe does notdischarge the onus which is on the creditor of proving, as againstthe subsequent transferee, what sum, if any, is due. on the bond.
PPEAL from an order of the District Judge of Colombo. Thefacts appear from the judgment.
H. E. Garvin, for third defendant and appellant.
H. V. Perera (with him Peri Sunderam), for plaintiff, respondent.
August 29, 1929. Drieberg J.—
The respondent brought this action to realize the amount dueon a mortgage bond dated July 6, 1920, by the first defendant.The bond was for Bs. 12,000, the respondent alleged that Rs. 6,000had been paid by the sale of some of the lands mortgaged, and heasked for a “decree for Rs. 6,000 and interest, amounting in theaggregate to Rs. 11,084, and for a hypothecary decree in respect ofthe other lands. He joined the second defendant and the appellantas they had bought the mortgaged premises after the mortgage..
The first defendant consented to judgment, and the seconddefendant did not contest the action, but the appellant filed answer,in which, while' admitting .the execution of the mortgage bond,he alleged that the bond was executed collusively and that noconsideration passed on it; he denied that any sum whatever wasdue from the first defendant to the respondent on it.
At the trial the following issues were framed: —
Was there consideration for the bond ?
Was it executed collusively between the respondent and thefirst defendant ?
What sum, if any, is due on the bond ?
51. N; IS 11394 na/5!)
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1829. An issue was also suggested whether the power of attorneyDribbbrg J. authorized the attorney under it to bring this action. This was
rejected by the learned District Judge as having been raised too
u.k^todeen* late. There is no reason, however, for doubting the sufficiencyof the power of attorney.
•The learned District Judge upheld the contention of the respond-ent that the onus of proof on these issues was on the appellant,being of opinion that if no evidence was led the respondent wouldbe entitled to judgment, -and that as regards the amount due onthe bond that was proved by the first defendant, the debtor, havingconsented to judgment, and that it was for the appellant to leadevidence to the contrary. No evidence' was led by either party andjudgment was entered for the respondent as claimed.
Where a creditor on a bond asks for a hypothecary decree againstproperty title to which has passed to a third party by a subsequenttransfer by the mortgage debtor, he has to prove the fact of themortgage, that it was executed to secure the repayment of moneydue to him, that the debt was not repaid, and that a definite sum ofmoney is due to him on the bond. Even under the system whichprevailed before the Civil Procedure Code, when the hypothecaryaction was brought against such third party after judgment hadbeen obtained against the debtor in a previous action, the creditorhad to prove de novo against such transferee all the facts whichwere necessary to entitle him to judgment, quite independently ofanything which occurred in the previous action; thus he had toprove in the subsequent action the existence of the debt and itsamount even though he had proved and obtained judgment for itagainst the debtor in the previous action, Ahamadu Lebbe Mankarv. Luis A
The Civil Procedure Code only altered the law to the extent-of requiring the hypothecary action—the actio serviana—to hecombined with the action against the debtor on his money liabilityon the bond.
In Wijeyesinghe v. Don Davith 2 Sir Charles'Layard C.J. said:“ It has been repeatedly held by this Court that the burden ofestablishing the existence of the debt due on a mortgage, where amortgagee seeks to follow the property in the hands of a thirdparty other than the mortgagor, is on the mortgagee.” This casewas after the Civil Procedure Code came into force.
Mr. Perera admitted that the onus of proof of the existence ofthe debt was on the respondent, but contended that in the absenceof contrary evidence by the appellant it had been discharged.He contended that as the appellant admitted the execution of the
1 (1819) 2 S. C. C. 80 and (1880) 3 S. 0. C. 99 (Full Court).
1 (1903) 2 Matara Cases 36.
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bond in which the debtor acknowledged the receipt of the considera-tion stated in it, that amounted to prima facie proof against theappellant,, and that as regards the amount due on the bond at thetime of the action the debtor’s admission in the consent to judgmentwas an admission against the appellant as a person who had derivedhis interest in the subject of the action .from the debtor; he reliedin this connection 'on section 18 of the Evidenoe Ordinance andon certain Indian decisions which deal with questions of liabilityarising between the creditor and the legal representative of thedebtor and between the legal representative of the originaldebtor and of the creditor. I need only refer to two of these cases.Rajeswari Knar et al. v. Jiai Bal Krishan 1 and Qorakh Babaji et al,v. Vithal Narayan Joshi.2
The subject matter of this action consists of two distinct things:the money liability which rests on the debtor and his representativesand the security created by the mortgage which attaches to theproperty in the hands of a subsequent transferee; this transfereeis not liable on the bond personally and cannot be called on to payany balance due on it which remains unrealized by the sale of theproperty. His position is distinct from that of the heirs or legalrepresentatives of the debtor and is entirely unaffected by anyadmission by the debtor as to the existence of the debt or theamount.
The creditor cannot get a decree that the property of thetransferee is liable for sale under the mortgage decree unlesshe proves against him the existence of that debt.
As the appellant has admitted the execution of the mortgage therespondent need only prove what sum, if any, is due on the bond,
' and he must do so apart from any admissions by the first defendant.
The issue that the bond was entered into oollusively and withoutconsideration does not affect the case, for .the onus of proof thatmoney was lent and that money was due is on the respondent.
The appeal is allowed. The judgment is set aside and the caseremitted for trial. The respondent will pay the appellant the costsof this appeal. The costs of the proceedings of February 7will abide the result of the action.
Fisher C.J.—I agree.
1 (Privy Council) 9 Allahabad 713.* 11 Bombay 435.
Abdul Lcbbev. Abideen