BYRDE v. CARPEN CHETTY

034-NLR-NLR-V-12-BYRDE-v.-CARPEN-CHETTY.pdf


( in )1909.May IS.
Present: The Hon. Sir Joseph T. Hutchinson, Chief Justice,and Mr. Justice Wendt.
BYRDE v. CARPEN CHETTY.
D. C., Kandy, 18,152.Sale oj movable property—Contempor.aneoue verbal agreement to re-conve.y—Bights of purchaser— “ BUI of Sale”—Ordinance No. 8 of1871, 8. 6—Sale of Goods Ordinance (No. 11 of 1896), s. 58 (3)—Civil Procedure Code, s. 247—Evidence Ordinance (No. 12 of 1895),ef . 92 and 99.
Where the owner of certain goods sold them to B by ah instru-ment in writing, and' by a contemporaneous verbal agreement Bundertook to re-convey them to the owner on payment of the amountpaid by him, and where the said goods were seized by a creditor ofthe owner as his property,—
Held, that B must be considered to be the absolute owner of thegoods, and that- he was entitled to have them released from seizure.
Held, also, that a judgment-creditor is not the representativein interest of the judgment-debtor within the meaning,of section92 of the Evidence Ordinance ; and that it is competent for ajudgment-creditor under section 99 of the Evidence Ordinance togive evidence of any facts tending to show a contemporaneousagreement varying the terms of a written contract entered intobetween the judgment-debtor and a third party.
( 115 )
A CTION under section 247 of the Civil Procedure Code. Thefacts are set out in the following judgment of the DistrictJudge (F. R. Dias, Esq.) (July 27, 1908):—
41 This is an action under section 247 of the Code, wherein theplaintiff (Colonel Byrde) sought a declaration that lie was the ownerof certain articles seized in execution under the defendant’s writ incase No. 17,883 against one Pless Pol, and prayed for their release.The plaintiff lias since died, and the executor of his will has beensubstituted in his place.
" The defence is that Colonel Byrde was never the owner of theproperty but only a mortgagee, and that the instrument under whichhe claims is null and void, as it was executed with' his knowledgefor the purpose of defrauding this defendant and other creditors ofPless Pol. For our present purposes the latter point is not in issue,and the only question before us is whether Colonel Byrde was theabsolute owner of the goods or only a mortgagee,
*• The facts were these. Pless Pol was the owner of a largequantity of hotel furniture and fittings which were deposited at aplace called the ‘ Savoy Hotel,’ anew hotel he was preparing to open.He was indebted to the defendant and several other creditors,including Colonel Byrde, and on July 2, 1906, by a notariallyexecuted deed (P 1) he professed to grant, bargain, sell, assign, andset over unto that gentleman nearly all the things on the premises,including several valuable billiard tables, pianola, organ, electroliers,bevelled minors, iron safe, chairs, bar counter, &c. The schedulevalue of these goods was Rs. 13,641, while the consideration for thedeed was an alleged debt of Rs. 6,500 due from Pless Pol to ColonelByrde, but which at that date was not in fact due.
Admittedly Rs. 5,000 out of that sum was only paid by ColonelByrde nine months after the date of the deed to another creditor ofriess Pol in case No. 17,801of this Court, Colonel Byrde havingstood security for Pless Pol in that case. Although Colonel Byrdewas ostensibly the purchaser of these goods, he never got possessionof them. They continued to be where they were, and in Pless Pol’spossession, until the date of seizure by the Fiscal. In spite of these .facts, it is contended that the title of Colonel Byrde to the goodsunder his deed is unquestionable, as it operated as an out and outtransfer of the goods to him from the .very moment that it wassigned. I am unable to accept that contention. It cannot for amoment- be denied that, no matter what the phraseology used inthis deed may be, it was a hill of sale within the meaning of ourOrdinance No. 8 of 1871, and registered as such.
“ Now, the purpose of this Ordinance was ‘ to amend iii certainrespects the Law of Mortgage and Hypothec ’ so far as it relatesto movable property, and not to prescribe the mode of transferringmovable property from a seller to a buyer. It lays down twomodes of effecting a valid mortgage of movable property : (1) By
1909.
May IS-
( HR )
1909. actual delivery, and (2) by hypothecation or bill of sale in writing,May 18. signed by the owner of the goods, and registered in the local Land
Registry within fourteen days. In the present case there was no
actual delivery, and so the parties entered into this bill of saleand duly registered it. It was argued that in this Ordinance theexpression ‘ bill of sale ’ has not the same meaning that it has underthe English Law, namely, a hypothecation of movable propertyretained in the possession of the grantor of the bill, inasmuch as insection 6 that expression is made to include. ! bills of sale, assign-ments, transfers,’ &c. The inclusion of this word ‘ transfers ’ in ourlocal Act does not differentiate an English bill of sale from what wasintended by the framers of oqr Ordinance to be a bill of sale inCeylon, because that word • appears in the English Act also, fromwhich this section of our Ordinance has been bodily taken over.(See 41 and'42 Viet., ch. 31, s. 4.)
“ The transfers referred to are not out and out transfers, givingthe transferee an immediate right to remove and appropriate thegoods to himself, but they are nothing more than transactions in theform of a contract of sale, intended only to operate by way of mort-gage , pledge, charge, or other security for a debt. Such transactionsare not unknown to our law, and they are recognized by our Sale ofGoods Ordinance, No. 11 of 1896, section 58 (3).
“ The whole tenor of the Ordinance No. 8 of 1871, and particularlythe last few words of section 6, indicate sufficiently clearly whatthe bills of sale, assignments, transfers, &c., therein referred to are,namely, transactions for the purpose of securing a debt. Comingto the facts of the case, I think it would be absurd to suppose thaton July 2, 1906, Pless Pol was capable of selling outright to ColonelByrde nearly all his new and expensive hotel furniture and fittingsworth Rs. 13,641 for a sum of Rs. 6,500, which he had not received,and it is equally impossible to believe that a private gentleman inthe position of Colonel Byrde could for a moment have intended tobuy for himself all this paraphernalia, or that he at any time thoughtit to be in his power to send carts to the Savoy Hotel whenever lieliked and remove the stuff to his own house. That was certainlynot the way in which Colonel Byrde and Pless Pol intended theircontract of July 2 to operate. We need not speculate as to whatthat intention was, as the best evidence of it is furnished by ColonelByrde himself. He gave evidence in two cases (No. 17,805 andNo. 1.7,883), in which he claimed goods covered by the deed inquestion and seized by Pless Pol’s creditors. This is what he statedin the former case in September, 1906 :—‘ The goods were trans-ferred-.to me in this way on the advice of some third party for greatersecurity. As a matter of fact, when I am paid the amount due tome,' I am to return the goods to defendant (Pless Pol).’ In theother case he admitted that he had only paid Pless Pol Rs. 1,500 incash, but stood security for him for a further sum of Rs. 5,000, and
( 117 )
that he was to return the goods to Pless Pol on being repaid the 1909.money actually paid by him. He added further :—* I took these , MaVgoods as security for my money, and not as a purchase.’
“ After such unequivocal admissions it is idle to contend thatColonel Byrde was ever the owner of these goods. He was a mort-gagee, and nothing more. A mortgagee of movable property, whois not in possession, has no right to claim it when seized under anunsecured creditor’s writ so as to prevent a sale thereof in execution,or to bring an action under section £47 of the Code when bis claimis disallowed. (See Wijewardene v. Maitland.1) 1 dismiss theplaintiff’s action with.costs.”
The plaintiff appealed.
H. A. Jayewa.rde.ne, for the plaintiff, appellant.
Sf leviratne. for the defendant, respondent.
Cur. adv. wit.
May 18, 1909. Hutchinson C.J.—
I think that the plaintiff is entitled to the relief which he claims,and that the appeal should be allowed. The deed on which he relieswas not a mere charge on the goods; it Was an absolute transfer, bywhich the ownership was vested in Colonel Byrde. By the con-temporaneous verbal agreement Pless Pol had the right'to call fora re-transfer on payment of the sum which he had received fromByrde; the property, however, was vested, in Byrde, and he was theowner, and was as such entitled to possession until he was repaid.
The District Judge says that he cannot believe that Byrde thoughtthat it was in his power to send carts and remove the stuff to his ownhouse. But surely he had that power, the very object of taking thedeed in this form was that he might have that power. Its objectwas to give him better security than he would have had from amere charge ; so he said himself , and clearly that was so. And therewas nothing unlawful in the transaction, and np evidence of anyfraudulent intention.
If Byrde had sued Pless Pol or any one claiming under him torecover possession of the goods, there would have been no defenceto the action, but at most a claim in reconvention to enforce theverbal agreement and to have a re-transfer on repayment. If thejudgment of the District Court stands, the goods will be sold andthe plaintiff’s rights will be lost, although the ownership of the goodsis vested in him. The ownership being still vested in the plaintiff,he should be declared entitled to the goods. This wdl leave PlessPol’s creditors at liberty to take.any steps which they may think fitto recover the goods under the verbal agreement.
(1893) 3 C. L. R. 7.
1909.
May 18.
Hutchinson
C.J.
( H8 )
In. my opinion our order should be that the decree of the District-Court be set aside, and that a declaration be made in accordancewith the prayer of the plaint, and that the defendant pay theplaintiff’s costs in both Courts.
Wendt J.—
This is an action under section 247 of the Civil Procedure Codeby an unsuccessful claimant of certain movable property seized bythe defendant in execution of a writ against the property of S. dePless Pol. Admittedly the property once belonged to Pless Pol,who disposed of it in favour of plaintiff’s testator by deed datedJuly 2, 1906, duly registered as required by the Ordinance No. 8 of1871. Defendant’s seizure was on August 15, 1906. The plaintiffpreferred a claim which the Court after inquiry disallowed, and hetherefore brought the present action praying that he be declaredentitled to the said property, and that the same be released from theseizure. The defendant in his answer denied that plaintiff hadpurchased the property, and averred that the deed in his favourwas executed by Pless Pol by way of security for a sum of Rs. 1,500,lent him by plaintiff, and that it was only a mortgage of the propertydescribed therein (including the articles the subject of the present-action), which was of the value of Rs. 13,641. Defendant furtherpleaded that the deed. was executed with a view to defraud PlessPol’s creditors, including the defenJ?,nt, and that plaintiff was wellaware of this. At the trial the issue trained was whether at the dateof seizure plaintiff was the owner or the goods in claim or only amortgagee. The deed in plaintiff’s favour was produced. By itPless Pol, in consideration of a sum of Rs. 6,500, the receipt whereofhe acknowledged, granted, bargained, sold, assigned, and set overunto the plaintiff, his heirs, executors, administrators, and assignsthe property enumerated in the schedule, aggregating in valueRs. 13,641, to have and to hold the said property to the plaintiff, hisheirs, &c. The deed A comprised a covenant to warrant and defendthe plaintiff’s title. It was admitted by plaintiff that of theRs. 6,500 only Rs. 1,500 had been ieceived by Pless Pol prior toits execution, and that the balance Rs. 5,000 was paid by plaintiffnine months later to another creditor of Pless Pol, plaintiff havingbecome surety for that debt. The. goods were never delivered toplaintiff, but remained in Pless Pol’s possession until their seizurebv the Fiscal.
At the trial there was no evidence of fraud. The defendant putin evidence the deposition of plaintiff at the inquiry into his claim,and his deposition upon a similar and earlier claim by him on theoccasion of another creditor seizing certain other goods comprisedin the deed of July 2, 1906 (D. C., Kandy, 17,805). In 17,805,plaintiff stated : “Defendant asked ne to become liis surety. Ideclined unless he gives me some sort of security. He then agreed to
( 119 )
sell the goods to me, and that was the form in which the security was
given The goods were transferred to me in this way on the
advice of some third party for greater security. As a matter of fact,when I am paid the amount due me, I am to return the goods todefendant.” Upon the claim which gave rise to the present actionplaintiff deposed: "There is nothing in the agreement as to are-sale back to Pless Pol. I was, however, prepared to return theproperty to Pless Pol on being repaid the money I had actually
paid I took these goods as security for my money, not as
a purchase.” The District Judge dismissed the action, holding onthe issue that the plaintiff was only a mortgagee; and plaintiffhas appealed.
At the argument before us, the principal point discussed waswhether parol evidence was admissible to contradict the writtendeed relied on by plaintiff, and section 92 of the Evidence Ordinancewas much canvassed. Section 92, however, does not apply. Thequestion here does not, of course, arise "between the parties ”the instrument, but it was sought to make out that defendant was a" representative in interest” of Pless Pol. I am clearly of opinionthat he is not, and that not being such, he is entitled by .the termsof section 99 of the Evidence Ordinance to give evidence of anyfacts tending to show a contemporaneous agreement varying theterms of the writing. It is true he is seeking to prove that at thedate of seizure his judgment-debtor was possessed of certain saleablerights in the goods, but he has not himself acquired any “ interest ”in the goods under or through the judgment-debtor. Unless he has,he is in my opinion not a "representative in interest” of thejudgment-debtor. “ Interest ” does not mean the kind of relationwhich is described in saying that defendant is “ interested in'provinghis debtor’s title,” it means a right of property. Taylor, in statingthe English Law, says (Evidence, 10th Edition, section 1,149) that therule excluding parol evidence is applied only in suits, between theparties to the instrument and their “ representatives,” a term whichwould include both a universal successor like an heir or executor oradministrator, and a singular successor who had taken the parti-cular property from a party to the instrument. I cannot see that theIndian Legislature by using the term “ representatives in interest ”meant anything different. The evidence tendered by the defendant,extraneous to the instrument, was therefore admissible. What, then,was the effect of it. In my opinion it clearly shows that, with theview of giving plaintiff greater security than he would have had ifthe goods were merely hypothecated, the parties agreed to makehim in law owner of them, on the understanding that when plaintiff’sadvances were repaid the property should be re-transferred toPless Pol. That intention was carried out in the deed, which madeplaintiff the proprietor of the goods, with every incident attaching .to the ownership, including the right of possession. Had plaintiff
1909.
May IS.
Wendt J.
1909.Mpy 18.
Wundt J.
( 120 )
sued Pleas Pol for the actual possession of the goods, I fail to seewhat defence there could have been to his claim. He is practicallyolaiming that possession now, and it is admitted that the debtsecured by the transfer is still due.. It may be open to Pleas Polor his representative—perhaps to a creditor of his—in a properlyconstituted proceeding to tender payment of plaintiff’s debt andclaim the re-transfer qf the goods, but that, cannot Le done bymerely seizing the goods as if the property in them were still vestedin Pless Pol.
I think the appeal should be allowed, and plaintiff declared theowner of the goods described in the plaint, which the Fiscal will beordered to release from seizure and deliver to plaintiff. Defendantwill pay plaintiff’s costs in both Courts.
Appeal allowed.