103-NLR-NLR-V-45-BARONCHI-Appellant-and-ARIYADASA-Respondent.pdf
Baronchi and Ariyadasa.
396
1944Present: Howard C.J. and Keuneman J.BARONCHI, Appellant, and ARITYADASA, Respondent32-33—D. C. Matara, 13,679.
.Mortgage action—•Claim for hypothecary decree against transferee—Burden ofproof—Matters that should be proven by plaintiff.
Id anaction on a mortgagebond inwhich the plaintiff asks for a
hypothecary decree against a subsequent transferee who has acquiredinterests inthe mortgagedpropertybypurchaseormortgage the
plaintiff is bound to prove (1) that the land belonged to the mortgagorat thetime ofthe mortgage,(2) thatit was duly mortgaged to him
at the timeof the mortgage,(3) thatthemortgagedebthas not been
paid andthat adefinite sum ofmoney isstill due, (4) that the plaintiff
is entitled to levy a definite sum of money out of the mortgaged property.
A PPEAL from a judgment of the District Judge of Matara.The
facts appear from the argument.
N. Nadarajah, K.C. (with him N. E. Weerasooria, K.C., and IvorMisso), for the second defendant, appellant, in No. 32 and the seconddefendant, respondent, in No. 33.—-This is an action on a mortgage bond•{P 1) executed in 1930 by the first defendant in favour of one Abeysuriyawho, aftercertainassignmentshad beenmade, became subsequently
the assignee of the bond. In execution of a money decree against Abey-suriya in C. R. Matara, 16,622 his interests in P 1 were sold to the presentplaintiff for the sum of Rs. 70. The second defendant has been made aparty because she is the administratrix of a person who bought themortgaged premises in 1931; the third defendant is her mortgagee.
As regards the execution proceedings in C. R. Matara, 16,622, there wasno appointment of any legal representatives on the deaths of the plaintiffand the defendant in that case. The provisions of sections 338 and 341of the Civil Procedure Code were not complied with. The sale, therefore,by virtue of which the plaintiff in the present case claims title was anullity.
396
HOWARD O.J.—Baronchi and Ariyadasa.
The plaintiff has not discharged the onus which the law imposes on himof proving, as against a subsequent transferee, what sum, if any, is due-on the bond. See Abdul Lebbe v. Abideen et aid.
C. W. Van Geyzel for the third defendant, appellant, in No. 33,and the third defendant, respondent, in No. 32.
H. V. Perera, K.O. (with him L. A. Rajapdkse, K.C. and D. Abey-wickreme), for the plaintiff, respondent, in both appeals.—As long as the;Court had jurisdiction to sell, irregularities, if any, in the executionproceedings in C. R. 16,622 would not invalidate the sale—Malkarjun v.Narhari et aid.
This case can be distinguished from Abdul Lebbe v. Abideen et at. (supra).While in the latter case no evidence at all was led by the creditor, in thepresent case the bond P 1 was put in evidence and the first defendantadmitted its execution.The effect not only of section 18 but also of
section 19 of the Evidence Ordinance has to be considered. The burden,of proof regarding any failure of consideration and on the issue of pay-ment was on the defendants. The bond P 1 does not contain any memo-randum of cancellation, nor was any discharge of it registered. In the-circumstances the formal burden of proof on the plaintiff has beensufficiently discharged. See Austin’s Reports, pp. 184-185; PrasadRai v. Bishan Dayal et aid; Alexander v. Hedges *.
N. E. Weerasooria, K.C., in reply.—Abdul Lebbe v. Abideen et al. (supra)is exactly in point. The present' case is even stronger because the firstdefendant has denied liability and there is no evidence that any sum was-due to the plaintiff. See also Wijesinghe v. Don Davith s. Whatevermay be the presumptions in law as between the mortgagor and themortgagee, they do not apply as against a third party. A third partycannot be expected to know the transactions which took place betweenthe plaintiff and the first defendant.
Cur. ado. oult.
July 21, 1944. Howard C.J.—
This case relates to two appeals, one by the second defendant in D. O'.Matara, No. 91/13,679 and the other by the third defendant in D. C.Matara, No. 92/13,679. In both these cases judgment was entered forthe plaintiff with costs to be paid by the first, second and third defendants.The plaintiff’s claim was in respect of a sum of Rs. 3,750 with interestalleged to be due on a mortgage bond dated December 18, 1930,marked P 1 and made by the first defendant in favour of one DanielAbeysuriya. The plaintiff also claimed a hypothecary decree in respect-of the premises referred to in the plaint. Various assignments were madeof the said bond which by virtue of P 2 dated July 6,1933, was-
assigned back to Abeysuriya. In case No. 16,622 of the Court of Requests,Matara, the interests of Abeysuriya in the said bond were sold in executionof a money decree against the said Abeysuriya. The plaintiff purchasedthose interests and obtained Fiscal’s Conveyance dated November 4,1938, marked P 7. The second and third defendants were made parties-
1 (1929) 31 N. L. R. 129.3 1904) I. L. R. 27 AU. 71.
– 1. L. R. (1900) 25 Bom. 337 at 346-7.1 1881) 4 S C. C. 85.
6 (1903) 2 Mat. Cases 36.
HOWARD C.J.—Baronchi and Ariyadasa.
397
on the basis that they had acquired certain rights in the mortgagedpremises. The rights of the second defendant arose from the fact thatthe first defendant by deed of March 21, 1928, 2 D 5, mortgaged thehalf share of the premises to certain parties who put the bond in suit.The interests mortgaged were purchased at the sale in execution by oneBaronchi who obtained on February 3,1931, Auctioneer’s conveyance
marked 2 D 7. The said Baronchi also purchased from the first defendantby deed of February 3, 1931, the entirety of the land described in theschedule to the plaint. The second defendant is the administratrixof the estate of the said Baronchi. The third defendant is a mortgageeof the interests of the second defendant in the land described in theschedule to the plaint.
Counsel for the second and third defendants have contended on twogrounds of law that the judgment of the District Judge is wrong. Thefirst of these grounds is that the execution proceedings in case No. 16,622of the Court of Requests of Matara are void and the sale bad and gavethe plaintiff no title. We think there is no substance in this contention.The second ground put forward by the appellants is that the plaintiff hasfailed to prove that any money was due on the original bond or that anyconsideration was paid in respect of such bond. With regard to thisaspect of the case, the learned District Judge states as follows: —
“ As regards (a) the plaintiff has produced the certified copy of thebond marked P 1 and the original marked P 8 both of which prove thatthe sum claimed by the plaintiff is due on the said bond. The firstdefendant who is the mortgagor has not contradicted this claim byevidence and I am therefore free to hold that the sum claimed is dueon the bond.”
In support of this contention Counsel for the appellants has referred usto the ease of Abdul Lebbe v. Abideen 1 the headnote of which is asfollows: —
‘ ‘ Where a creditor on a mortgage bond asks for a hypothecarydecree against the property, title to which has passed to a third partyby a subsequent transfer by the debtor, the burden is upon the plaintiffto prove the execution of the mortgage, and the sum of money dueupon it.
An admission by the debtor of the amount due does not dischargethe onus which is on the creditor of proving, as against the subsequenttransferee, what sum, if any, is due on the bond.”
In his judgment in this ,case Drieberg J. referred to a passage from thejudgment of Sir Charles Layard C.J. in Wijeyesinghe v. Don Davith,2.This passage is as follows: —
“ 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 third partyother than the mortgagor, is on the mortgagee.”
The same principle is also formulated in Ahamado Lebbe MarTcar v. Luis 3.The plaintiff in this case had obtained a decree for money against his
1 31 N. L. R. 129.z(1903) 2 Matara Cases 36.
3 2 S. C. Cir, 80 and 3 S. C. Cir. 99.
398
HOWARD C.J.—Baronchi and Ariyadasa.
mortgagor on a mortgage bond by which the land was specially mortgagedto him. The defendant was in possession of this land by virtue of aconveyance from the plaintiff’s mortgagor. The plaintiff then broughtan action against the defendant to have it declared that the land wasliable to be seized and sold in execution of the plaintiff’s mortgage decree.In his judgment at page 81 of 8 Supreme Court Circular, Phear C.J.stated as follows : —
“ As has already been said, the plaintiff in this suit must prove^against the defendant all the facts, which are essential to his allegedright under the mortgage to sell, de novo, and quite independentlyof anything which occurred in that other suit. It seems thereforeincumbent upon him at least to establish that the land in questionbelonged to his mortgagor at the date of his mortgage, that it wasthen mortgaged by that owner to him, by a sufficient instrument ofmortgage, in order to secure the repayment to him of a specific sum ofmoney actually then due as a debt to him from the mortgagor uponsome sufficient consideration. That this debt has not been paid,but that a definite sum of money, being the whole or part thereof,Is still due to him, secured by this mortgage, and that he is entitled toissue or to have issued writs of seizure and sale for the purpose oflevying this definite sum of money out of the mortgaged premises.”
The case was next considered by the Full Court at page 99 of 3 SupremeCourt Circular. In the course of his judgment Cayley C.J. stated asfollows: —
“ It accordingly appears to me to be clear that if the plaintiff hasproved (as he appears to have substantially done) his mortgage,his mortgagor’s title at the time of the mortgage, and that the mortgagedebt is still unpaid, he is entitled to a decree in his favour declaringthe property liable to be sold to satisfy that debt.”
The following passage from the judgment of Dias J. is also of interest: —
“ In its judgment of May 2, 1879, this Court seems to have assumedthat the plaintiff’s judgment against his debtor had the effect of amortgage-decree rendering the mortgaged property liable as againstthe mortgagor to be sold to satisfy the plaintiffs’ debt. As the presentdefendant is a third party in possession of the mortgaged property,this Court held that the plaintiff was bound to prove, as against thepresent defendant, the whole of his right to have the mortgagedproperty sold in satisfaction of his claim. The plaintiff hadfailed to do at the first trial, but this Court having given him anotheropportunity, he has, I think, made out a case to entitle him to adecree as against the present defendant.”
Mr. Perera, on behalf of the plaintiff, has contended that the burdenof proving that the bond was discharged lies on the defendants. Insupport of this contention he has referred us to Austin’s Reports, 26,341,pp. 184-185, Alexander v. Hedges 1 and Prasad Rai Y. Bishan Dayal -.In all these cases, however, the defendants were the orijpnal mortgagorsand not as in this case persons in possession of the mortgaged premises
by virtue of assignment.
1 4 S. C. Cir 85.
2 I. L. R. 27 AU. 71.
MOSELEY J.—Gtmawardena and Kandy Police.
399
Applying the pmciples formulated in the cases I have cited to thefacts of the present case it is, I think, clear that before the plaintiff couldsucceed against the second or third defendant he would have to show—
that the land belonged to the mortgagor at the time of the mortgage,
that it was duly mortgaged to him for a sufficient consideration,
that the mortgage debt had not been paid and that a definite sum ofmoney was still due, (4) that the plaintiff is entitled to levy this sumout of the mortgaged property. It may be conceded that—(1) and (2)are established by production of the mortgage bond, (3) and (4) havenot, however, been established and I am of opinion that the learnedDistribt Judge was in error when he held that the copy of the bond PIand the original P 8 both prove that the sum claimed by the plaintiff isdue on the said bond.
The appeal is therefore allowed and the judgment set aside. The caseis remitted for the plaintiff to adduce evidence to prove that a definitesum of money is due on the mortgage bond. The respondent will pay thesecond and third defendants the costs of this appeal. The costs so farincurred in the District Court abide the result of the action.
Ketoemas J.—I agree.
Appeal allowed.