066-NLR-NLR-V-25-ADAPPA-CHETTY-et-al-v.-BABI.pdf
( 284 )
1928.
Present: Jayewardene A.J.
ADAPPA CHETTY et at. v. BABI.
207—C. R. iTegraZto, 18,347.
Mortgage decree—Effect of not registering decree.
R mortgaged the land in question to A in 1912. The bond wasregistered in the same year. In 1915 he mortgaged the sameland to C. In 1918 G put his bond in suit and obtained mortgagedecree, which decree was never registered. At the execution saledefendant purchased the land in September, 1920 (Fiscal'stransfer, June 10,1921). A put his bond in suit in February, 1920,and obtained decree in March, 1920, and registered the decreein October, 1920. The plaintiff purchased the property at theexecution sale on June 5, 1921 (Fiscal's transfer in 1923). Thedefendant was in possession, and the plaintiff (purchaser under thefirst mortgage) sued him for declaration of title. Neithermortgagee had complied with the provisions of sections-643 and644 of the Civil Procedure Code.
Held, that as the decree in favour of A (first mortgagee) wasregistered the plaintiff had superior title.
Mortgage decrees require registration. If a mortgage decree'is not registered, any person claiming adversely to it under asubsequently registered instrument or decree is entitled to saythat the unregistered decree is void as against him.
Salmon v. Gabo * followed.
1 S3 L. J. Q. B. 314.* (1905) 1 leembruggen's Rep. 27.
T
HE facts are set out as follows by the Commisioner ofBequests (W. J. L. Rogerson, Esq.) in his judgment
One Raaa mortgaged the land in claim by bond 17,827 of September26, 1912. to Anaznalay Chetty. This was the primary mortgage.Anamalay Chetty died, and his estate was administered by Supra-maniam Chetty, who also died, and his estate was administered. Hisheirs were Adappa Chetty and Karupa Chetty. They institutedmortgage bond action C. R. 16,667 against Rana in 1920. The bondwas reduced to judgment in 17,320, and decree registered in October, .
The property was sold in execution in June, 1921, and purchased•by plaintiff, who obtained Fiscal’s' transfer 6,084 of January 13, 1922,duly registered on January 17, 1922. Plaintiff failed to register hisaddress for the information of puisne encumbrancers. The effect ofthis failure is only to prevent him from taking a separate actionagainst a puisne encumbrancer to have the mortgage property bondre-executable for the mortgage debt.
On March 30, 1915, Rana executed a secondary mortgage on bond21,285 in favour of defendant. Defendant instituted mortgage bondaction C. R. 15,029 on this bond on January, 1918, and obtained adecree in March, 1918. He did not register this decree. The propertywas sold on execution under his writ on September, 1920, and purchasedby defendant, who obtained Fiscal’s transfer 5,974 of June 10, 1921,which was registered on June 22, 1921, according to plaintiff, in thewrong folio. The issues framed are :—
(1) Is defendant bound by the decree in C. R. 16*667 ?
I take plaintiff’s position to be that defendant is so bound becauseas mortgagee on bond 15,029 he failed to register his address.
(2) Even if not, does plaintiff gain a superior title by reason of theprior registration of the mortgage bond decree under which hepurchased-?
Is plaintiff’s transfer superior to defendant’s transfer by reasonof due and prior registration ?
Defendant depends for his position almost entirely on the Full Courtdecision of N. L. R. 20, cited above. He argued that plaintiffhaving admittedly failed to register his address will have no remedyagainst subsequent encumbrancers. He also quotes N. L. R. 16, p. lS9tand argues that defendant’s vendor not' being a party to plaintiff’saction in the bond, defendant’s bond must prevail over the sale toplaintiff. I will deed with this authority first: A reading of theheadnote shows that that was a contest between a lease and a mortgage,the latter being taken in execution but prior in registration. It washeld that the prior registration of a mortgage bond enures to thebenefit of the purchaser in execution of the mortgage decree. That isnot the question that arises in the present case, where the contest isbetween two Fiscal’s transfers executed as the result of sales in execu-tion ill two mortgage bond actions. In the present case plaintiff's bondis prior both in date and registration to defendant's bond. The decisionquoted cannot apply.
I will now deal with defendant’s argument from the decision inN. L, R. 20. The argument is fully dealt with in the decision in appealin D. C. Kandy, 29,596.
As already stated, defendant’s position is that by his failure toregister his address plaintiff has lost his rights to have the land sold
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1921
AddappaOh&y*. Babi
under bis bond, as the decree obtained by him was prior in date to thatobtained by plaintiff, and his Fiscal’s transfer is also prior.
The whole question is considered in the judgment in D. 0. Kandy,29,696, in which the facts were very similar to those of the present case.
The learned Commissioner discussed the oases, and continued
There was then no irregularity in the plaintiff’s method of realizinghis bond. The prior registration of defendant’s Fiscal’s transfer, evenif it is duly registered, cannot prevail over plaintiff’s transfer. Forwhat defendant bought at the sale was only the interest of thesecondary mortgagee which he bought subject to the primary mortgage.This decision must be held to be binding even if it apparently conflictswith the later judgment in D. C. (F) Jaffna, 15,536, decided on the 6thinstant and reported in the “ Times of Ceylon ” of the 15th instant. Thatwas a case of competing purchasers : one of which was by a mortgagee,the other being purchaser at a sale in execution of a money decree.It is a decision of De Sampayo A.C.J., who formed one of the Benchwhich decided D. C. Kandy, 29,596. It does not deal with therights of primary and secondary mortgagees.
In view of my decision it is not necessary to answer the effect of atransfer not duly registered.
Schokman, for defendant, appellant.—The Commissioner waswrong in having followed the decision of the Full Court in Moraesv. Nallan Chetty1 in preference to the earlier Full Court decisionof Supramanian Chetty v. Weerasekera,2 for the facts in the formercase are different from those in the present case, whereas theposition of the parties in the present case closely resembles thatin Supramanian Chetty v. Weerasekera (supra). The facts inMoraes v. Nallan Chetty (supra) were distinguished from thosein Supramanian Chetty v. Weerasekera (supra) on two grounds,viz., (1) that the former was the case of a secondary mortgageetrying to take advantage of the non*compliance, with requirementswhich were held to be necessary to bind subsequent grantees,donees, or leesees, a distinction being drawn between the positionof a subsequent mortgagee and that of a subsequent .grantee;(2) that the primary mortgagee was not bringing a supplementaryaction, but was only defending himself when assailed, and there wasnothing to prevent him from setting up by way of defence what hemay not set up by way of attack. With regard to the first point,sections 643 and 644 of the Civil Procedure Code wedges mortgageesin between grantees, lessees, and other incumbrancers, and henceno distinction, can be drawn between the position of a mortgageeand that of grantees, &c. With regard to the second point, in thepresent case the defendant (purchaser under the secondary mortgagedecree) is in possession, and the purchaser under the primarymortgage is seeking to attack him. The latter’s position is differentfrom the position of the primary mortgagee in Moraes v. NdUanChetty (supra). Thus the present case must be governed by
1 {1923) 24 N. L. B. 297** (1910) 20 N. L. B. 170.
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Supramanian Chetty v. Weerasekera (supra), where too the sob- 1928.sequent grantee was In possession and was assailed by the primary AMappa
mortgagee.Chettg
«. Babi
H. V, Perera, for plaintiff, respondent.—Granting that defendantiB not bound by the primary mortgage decree owing to themortgagee’s failure to comply with sections 643 and 644, yet thedefendant’s Fiscal transfer is of no avail against plaintiff, as thesecondary mortgagee’s decree was not registered. The primarymortgagee’s decree has been registered, and therefore renders voidthe earlier unregistered decree.
Counsel cited 6 N. L. S. 21 and 1 Leembruggen9s Reports 27.
Schohman, in reply.
September 27, 1923. Jayewabdenb A.J.—
In this case there is a conflict arising between two purchaserson mortgages executed by the same mortgagor. The land inquestion admittedly belonged to one Rana. He by mortgage bondNo. 17,827 of September 26, 1912, mortgaged the land to oneAnamalay Chetty, and three years later by mortgage bond No. 21,285of March 30, 1915, he mortgaged the same interest to Charles Appu-hamy. Charles Appuhamy put his bond in suit in January, 1918,obtained a decree in March, 1918, and at the execution sale theproperty was purchased by the defendant on September 30, 1920.
He obtained Fiscal’s transfer No. 5,974 of June 10, 1921. Thedecree obtained in March, 1918, was never registered. AnamalayChetty instituted case No. 16*667 on his bond in February, 1920,obtained a decree in March, 1920, and he had it registered onOctober 16 the same year. The plaintiff purchased the propertyat the execution sale on June 5, 1921, and obtained a FispaPstransfer No. 6,085 on January 13, 1922. The purchaser under thesecond mortgage is now in possession, and the plaintiff, the purchaserunder the first mortgage, sues him for a declaration of title. Neitherparty had complied with the requirements of sections 643 and 644of the Civil Procedure Code. The learned Commissioner followingthe decision of this Court in Moraes v. NaUan Chetty (supra) upheldthe claim of the plaintiff and gave judgment in his favour. Thedefendant appeals, and tries to distinguish the present case from theFull Court case of Moraes v. NaUan Chetty (supra) by pointing outthat in that case the purchaser under the first mortgage was inpossession, and that the purchaser under the second mortgage wassuing him to assert his rights to the land. The learned ChiefJustice in the Full Bench case thought that that was a distinctionwhich might make the decision of a previous Full Court case inSupramaniam Chetty v. Weerasekera (supra) inapplicable to the factsof the case he was dealing with. I need not deal with this distinction
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teas.
Jatbwab-DBRB A.J.
AdappaChiuyv* Babi
between the present case and the case of Moraes v. NaUan Chetty (vbisupra), but it is clear that there is a direct conflict .between the ratiodecidendi of the Full Bench decision in Supramaniam Chetty v. Weera-sekera (supra) and the ratio decidendi of the Full Bench judgment inthe case of Moraes v. Nallan Chetly {supra), and if I had to decide thequestion on the issue whether the plaintiff lost his rights as againstthe defendant who purchased under the second mortgage by hisfailure to comply with the requirements of 'sections 643 and 644,1would have had to decide which of these two Full Court decisions Ishould follow. But the necessity for doing so is obviated by a freshpoint taken by Mr. Perera, which shows that the defendant’spurchase at the Fiscal’s sale is null and void as against his client’spurchase, because the decree on which the defendant has purchasedhas never been registered, while the decree under which the plaintiffpurchased, which was later in date to the decree under which thedefendant purchased, has been duly registered under the RegistrationOrdinance. Mortgage decrees require registration. I might refer tothe oase of Mader Lebbe v. Nagamma,1 where Bonser C.J. said that“ a mortgage decree is a decree which is capable of being registeredunder the Registration Ordinance and ought to be registered,,and ifit is not registered any person claiming adversely to it under asubsequently registered instrument, or decree is entitled to say that* that unregistered decree is void as'against meJ ” (see also sections15 and 16 of the Registration Ordinance of 1891), and the facts of thecase of Salmon v. Gabo2 seem to be on all fours with the facts of thepresent case. In that case it was held that the registration of asubsequent mortgage decree renders null and void a prior mortgagedecree against the same land which is not registered. This is ajudgment of two Judges, and I am bound by it. Mr. Schokman,who appears for the appellant, is not able to distinguish the presentcase from the case of Salmonv. Gabo (supra). In the circumstances,I follow the case of Salmon v. Gabo (supra),__and hold that allproceedings had under the decree under which the defendantpurchased are void as it was unregistered and as the decree underwhich the plaintiff bought has been duly registered.
I accordingly dismiss the appeal, with costs.
Appeal dismissed.
♦
1 (1906) 6 N. Li R. 21.
8 (1905) 1 Leembruggene'j Rep. 27. *