CHELLAPPAH v. McHEYZER et al

087-NLR-NLR-V-38-CHELLAPPAH-v.-McHEYZER–et-al.pdf


Chellappah v. McHeyzer.
393
1937Present: Poyser and Soertsz JJ.
CHELLAPPAH v. McHEYZER et al.
274—D. C. Colombo, 46,747.
Warranty—Express covenant to warrant and defend title—No warranty oftitle—Remedy of purchaser—Roman-Dutch law.
Where in an agreement for the sale of land there is an express covenantto warrant and defend title, the purchaser is not entitled to withdrawfrom the sale on the ground of a defect of title in the vendor.
Where there is an express warranty of title the purchaser is entitledto refuse to complete the sale if he is able to show that the vendor hasnot the good title he warranted.
An express warranty of title occurs when a vendor in so many wordswarrants that he has a good and lawful title.
James v. Suffa Umma (17 N. L. R. 33) followed.
Fernando v. Perera (17 N. L. R. 161) and Babapulle v. Umma(4 C. W. R. 420) distinguished.
T
HE plaintiff brought this action against the second defendant-appellant and another defendant, a licensed auctioneer, alleging •
that the defendant-appellant through the other defendant put up forsale two allotments of land of which he was declared the purchaser. Healleged that in compliance with the conditions of sale he paid to theauctioneer two sums of money which represented one-tenth of thepurchase price of the two allotments. He averred that the first defendant(the auctioneer) at the sale declared that a good, valid, and marketabletitle would be made out for the said allotments. Alternatively he pleadedthat the defendants impliedly agreed to make out and convey a good,valid, and marketable title. The second defendant in his answer deniedthat any representation with regard to a good, valid, and marketabletitle was made either by him or the first defendant. He pleaded thatthe plaintiff had made default in the payment of the balance purchaseprice and that under the terms of the conditions of sale he forfeitedthe one-tenth purchase price he had paid and also became liable topay the difference between the price at which he had bought the twolots and the price realized at the subsequent sale and he claimed the■difference.
The learned District Judge held that there was an express warrantyof title and gave judgment for the plaintiff.
N. E. Weerasooria (with him Corea), for second defendant, appellant.—Anexpress warranty of title must be distinguished from an express covenantto warrant and defend title. A vendor whether he says so expressly ornot is bound to warrant and defend title. He is not obliged to conveygood title but merely to give vacant possession. (James v. Suffa Umma. )
We are prepared to give vacant possession.
H. V. Perera (with him E. B. Wikramanaycike), for plaintiff, respond-:ent.—There was a statement by the auctioneer, that the appellant had agood and marketable title. Plaintiff bought on that representation.That amounts to a warranty of title. At any rate, if the representation
* 17 N. L. R. 33
394
SOER’i.'SZ J.—Chellappah v. McHeyzer.
was false, the contract is voidable. The Judge has found that at wasfalse. The appellant cannot on his own showing convey the title. SeeMisso v. Hadjiar *, Fernando v. Perera *.
N. E. Weerasooria, in reply.—The issue as to the false representationwas abandoned at the trial.
Cur. adv. vult.
April 19, 1937. Soertsz J.—
The plaintiff brought this action against the defendant-appellant andanother defendant, alleging that on certain notarially attested conditionsof sale, the defendant-appellant, through the other defendant who is alicensed auctioneer, put up for sale certain allotments of land, and thatat that sale he the plaintiff was declared the purchaser of two of thoseallotments at the prices of Rs. 3,800 and Rs. 3,700. He stated that incompliance with the conditions of sale which he signed, he paid to theauctioneer the sum of Rs. 582 and Rs. 627.50, which represented one-tenth of the purchase price of the allotments he had bought, plus theexpenses of the sale. He averred that the first defendant (that is, theauctioneer) at the said sale declared that “ a good, valid, and marketabletitle would be made out for the said allotments and that they would beconveyed free of incumbrances, and that till the execution of validconveyances in favour of the plaintiff, the first defendant would hold thepurchase price in his hands”. Alternatively, he pleaded “that thedefendants impliedly agreed to make out and convey a good and validand marketable title free of all encumbrances, and that there was animplied obligation on the part of the first defendant to refund thepurchase price to the plaintiff, in the event of deeds of conveyance notbeing executed in favour of the plaintiff ”. The plaintiff further averredthat “ the defendants were neither able to make out a good, valid, andmarketable title, nor to convey the said allotments free of encumbrances ”.He therefore prayed for judgment against the defendants jointly andseverally or in the alternative for the said sum of Rs. 1,209.50.
The defendants filed separate answers. The first defendant pleadedthat there whs a misjoinder of parties and of causes of action ana alsostated that he was under no obligation to make out any title, or to conveythe allotments to the plaintiff, but that the second defendant wasprepared to convey those allotments, to the^plaintiff and to place him inpossession on payment of the balance purchase amount. He prayedthat the plaintiff’s action be dismissed.
The second defendant, in his answer, denied that the first defendantmade “ any representation that a good, valid, and marketable title wouldbe made out for the said allotments and that they would be conveyedfree of encumbrances ”. He stated further that the first defendant hadnot his authority to make such a representation. He pleaded that theplaintiff had made default in the payment of the balance purchase priceand that under the terms of the conditions of sale, he forfeited the one-tenth of the purchase price he had paid, and also became liable to paythe difference between the price at which he had bought the two lots,and the price realized at the subsequent resale and he claimed this
difference, a sum of Rs. 2,100 in reconvention.-
• 19 N. L. R. 277.
* 17 N. L. R. 161.
SOERTSZ J.—Chellappah v. McHeyzer.395
The case went to trial on a number of issues, but it must be partic-ularly noticed that- before the plaintiff’s Counsel began his case, theplaintiff consented to his action against the first defendant being.dismissed with costs which were fixed at Rs. 475. The District Judgethereupon made the following note : —As a result of the settlement of thecase with regard to the first defendant, the following issues go out—1, 2,3, 13 (a) and (b). Issues 1, 2, 3, are these : —1—Did the first defendantat the auction sale of the lots referred to in the plaint represent that a.good, valid, and marketable title would be given for the said allotmentsof land ? 2—Did the first defendant represent at the said sale that thesaid allotments of land would be conveyed free of all encumbrances ?■3—Did the first defendant represent that till' the execution of a validconveyance in favour of the plaintiff, he would hold the part of thepurchase price in his hands ?
Once these issues were discarded the important issues left were : —4—Did the defendants impliedly agree to give and convey a’good, valid,and marketable title free of all encumbrances ? 5—Was there an impliedobligation on the part of the defendants to refund the purchase price tothe plaintiff in the event of a good, valid, and marketable title not beinggiven to the plaintiff ? 6—Were defendants unable to give a good,valid, and marketable title ? (This should have been amended to.Was second defendant ….?) 7—Wassecond defendant
unable to convey to plaintiff the said lots free of all encumbrances ?12—Was the second defendant under any obligation to make out a good,valid, and marketable title …. or to convey …. toplaintiff free of all encumbrances ?15—Was the second defendant ready
and willing to convey the said lots to the plaintiff on payment of thebalance purchase price and to place him in possession of the said lots ? ”
After trial, the learned District Judge answered these issues as follows : —Issue 4—Yes. Issue 7—Yes. Issue 12—Whatever the obligation thedefendant made an express warranty. Issue 15—In view of my findingon issue 10, this issue does not arise. Issue 10 was—Did the defendantswaive their rights under clauses 5 and 6 of the condition of sale ? andthe answer to it was “ There was no valid agreement entered into ”.He entered judgment for the plaintiff for Rs. 750 to which the plaintiff’s•claim had been reduced in consequence of his case against the firstdefendant being dismissed and he rejected the second defendant’s claimin reconvention.
On appeal, Counsel for the second defendant did not press his client’sclaim in reconvention, very properly in my opinion, for the so-calledresale had been obviously staged for the purpose of enabling the seconddefendant to make this claim. It ended on a Gilbertian note when thesecond defendant himself became the purchaser of what was alreadyhis property.
The sole point, then left for consideration on this appeal, is whetheron the facts of this case, the plaintiff is entitled to recover the part of thepurchase price he paid on the day of the sale. The trial Judge hasanswered that question in the affirmative basing his judgment on twogrounds, namely, (1) that there was an express warrantly of title given byor on behalf of the vendor, and the vendor was now found not to have a
29/38
396
SOERTSZ J.—Chellappah v. McHeyzer.
complete title, (2) that there was a misrepresentation by the seconddefendant’s agent, the auctioneer, * that a good, valid, and marketabletitle would be made out for the said allotments and that they would beconveyed free of encumbrances In regard to (1) ‘ express warrantyof title the facts found by the trial Judge are that although clause 10 in theconditions of sale originally stipulated that the vendor would not warrantand defend title that stipulation was waived before the sale and thevendor undertook to warrant and defend title. That appears to be acorrect finding, but the difficulty arose when from it the Judge drew theinference that there was an express warranty of title. If I may say so,there appears to have been a certain confusion of ideas in the mind of thetrial Judge in regard to the meaning of an express undertaking to warrantand defend title and a warranty of title. He appears to have thoughtthat where there is a definite undertaking in a document that the vendorwill warrant and defend title, there is an express warranty of title.But that of course is not so. An express warranty of title occurs whena vendor in so many words warrants that he has a good and lawful title.Whereas in every contract of sale, other than one in which the vendordefinitely states that he will not warrant and defend title, there is implied,if it is not expressed, an undertaking to warrant and defend title if andwhen it is challenged. In the present case, clearly there is no expresswarranty of title but only an explicit undertaking to warrant and defendit. In regard to the alternative averment in the plaint, that there wasan implied warranty of title, Burnside C.J. commented strongly when itwas advanced in the case of Silva v. Ossen Saibo1. He said “I do nothesitate to assert on the research which I have made, that this allegeddoctrine of implied warranty in every sale, if enforced in its integrity,would involve results so grotesque and ridiculous as could not beaccepted by any one, who may even pretend to set it up, as touching thetitle to land among the peasantry of this Colony ”. But assumingalthough not conceding, that there is such a warranty of title implied incertain cases, we are at once confronted in this case with the ruling ofHutchinson C.J. and Wendt J. in Vander Poorten v. Scott2, that wherethere is an express convenant by which the vendor undertakes to warrantand defend title, no further or other covenant can be implied. Expressumfacit cessare taciturn. The purchaser must be taken to have intended torely on the express convenant only. See also Misso v. Hadjiar ”. In thepresent case, as I have already observed clause 10 as amended at the salecontains an express covenant to warrant and defend title and conse-quently “ no further or other covenant can be implied ”.
In this view of the matter, this case falls to be governed by theprinciple enunciated in James v. Suffa Umma In that case two of thethree Judges, Wood Renton A.C.J. and De Sampayo J., Ennis J. dissent-ing, 'held that a purchaser of land at an auction sale, who has signednotarily attested conditions of sale agreeing to complete the purchase,is not entitled to withdraw from the sale on the ground of any defect oftitle of the vendor, and that in the absence of fraud on the part of thevendor, or of any express warranty of title he is entitled to get onlyvacant possession. “ In the Roman-Dutch law there is no obligation
1 2C.L. B. 29.
* 11 N. L. B. 147.
8 19 N. L. B. 277.« 17 N. L. B. 33.
SOERTSZ J.—Chellappah v. McHeyzer
397
on the part of the vendor to convey good title. His obligation is to givevacant possession, and to warrant against eviction”. But, of course,if there has been fraud, the purchaser is always entitled to obtain arescission of the sale, for fraud vitiates every contract. Or, if there hasbeen an express warranty of title the purchaser is entitled to refuse tocomplete the sale if he is able to show that the vendor has not the goodtitle he warranted.
In the present case, no fraud has been or can be alleged and there isno express warranty of title. The vendor is prepared to give vacantpossession, but the purchaser would have none of it because, he says, thatthe vendor’s title ‘ does not total a unit ’ and that a certain Mrs. Gooneratneis claiming an interest in the land. Now although a vendor’s paper titlemay not account for all the shares that go to make a unit he may beable to make out a good prescriptive title. In this case, there is evidenceto show that the vendor has been in possession of this land for long overthe prescriptive period. Mrs. Gooneratne herself says “ I am the nieceof the defendant. I know the lands which were sold. My uncle was inpossession of those lands …. By possession, I mean the landsbelonged to him. I did not claim a share of the land ”, Later she addsin regard to one lot of land “ Lot 61e 2a adjoins my block and forms partof my block. My uncle had to make arrangements with me in referenceto that land …. He agreed to pay me Rs. 1,000 ”. Thesecond defendant’s evidence on this point is “ Mrs. Gooneratne had to joinme in the conveyance. I would have had to pay her something. Shestipulated for a payment of Rs. 1,000. If she pressed, I would have hadto buy her off, but I do not think she would have done so ”. Now,in Roman-Dutch law, there is nothing to prevent a vendor from sellingthe property of another provided, of course, he does not do so fraudulently,and is able to give the purchaser vacant possession, and to warrant himagainst eviction. So that even on this question of title it is not possibleto hold that the second defendant was not in a position to convey a goodtitle if the law imposed that obligation on him. Much less is it possibleto say that he was acting fraudulently and not bona fide, when- he put upthese lands for sale as lands in respect of which he could give vacantpossession and warrant against eviction. The case of Fernando v.Per era1 is easily distinguishable. There the vendor stipulated that hehad a good title and undertook to execute “ a good and valid conveyanceof the said premises free from all encumbrances The Judges whodecided that case followed an English case, Lysaght v. Edwards and heldthat a stipulation to execute a good and valid conveyance meant a convey-ance not only sufficient in form or substance, but also a conveyanceeffective in law to convey unfettered ownership. In regard to this it isnot necessary, on this occasion, to say anything more than that there isno such undertaking in the present case, but only an undertaking that“ on payment of the balance, the vendor shall execute a conveyance ”.Similarly, the ruling in the case of Bdbapulle v. Umma*, if it is sound, is .a ruling on an entirely different set of facts. That was a sale held onan order of Court, and that case was distinguished by the Judges whodelivered that judgment from the case of James v. Suffa Umma (supra) on
111 N. L. B. 261.8 2 Ch. D. 507.
* 4 C. W. B. 420.
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SOERTSZ J.—Chellappah v. McHeyzer
the ground that in that case the sale was one inter partes and the purchaseraccordingly had his remedy against the vendor on the covenant to warrantand defend title in the event of an ejectment, whereas in the case beforethem the purchaser would have no remedy if evicted. The case ofMarikar v. Aron Perera1 is, in fact, a reassertion by the two Judges whodecided James v. Suffa Umma (supra) of their ruling in that case.Wood-Renton C.J. said in the course of that judgment that “ the clause inthe conditions of sale which imposes on the first defendant an obligationto execute a conveyance does not involve any warranty of title
If I may say so with great respect the cases of Fernando v. Perera (supra)and Babapulle v. Umma (supra), if they do not amount to attacks on thesoundness of the decision in James v. Suffa Umma (supra), are at leastintended to reduce as much as possible the scope of a decision whichappears strange when viewed in the light of the principles of the law ofEngland. Indeed, in Fernando v. Perera, Pereira J. concludes his judg-ment with the observation that “ under the laws of England it is, ingeneral, sufficient if the vendor shows he has a good title by the timefixed for the completion of the contract of sale, but if it appears beforethat time that he has not a title and is not in a position to obtain one,the purchaser can repudiate the contract. ‘ I can see no objection toallow ourselves to be governed by this reasonable and equitable rule.’ ”But, surely the objection, to such a course is that we are under theRoman-Dutch law on these questions ‘ relating to the tenure, or con-veyance or assurance of, or succession to any land or other immovableproperty, or any estate right or interest therein and according tothat law, the correct view with great deference appears to be thattaken by Wood Renton A.C.J. and de Sampayo J. in James v. SuffaUmma. At any rate, that is a ruling by a Divisional Bench and weare bound by it in this case in which it is not possible to pretendthat the facts can be properly distinguished.
In regard to the second ground upon which the trial Judge based hisjudgment—misrepresentation—-he says, “ plaintiff was induced to signthe conditions of sale by the misrepresentation (it matters not whetherit was innocent or wilful) made by the agent of the second defendant ”.But, here, he has lost sight of the fact that the allegations of misrepre-sentation were abandoned before the trial commenced, when issues 1, 2,and 3 were dropped. Those issues must be taken to have been droppedbecause the plaintiff realized that he could not substantiate the mattersinvolved in them.
The averments in paragraphs 3 and 4 of the plaint have the air of atext copied out of the report of the case of Fernando v. Perera (supra).At any rate, the plea in paragraph 3 was abandoned and I have alreadydealt with the plea in paragraph 4.
The judgment of the learned trial Judge cannot therefore be sustainedon either of the grounds upon which it is based. Respondent’s Counseldid not seek to support it on any other ground nor do I see that it can beso supported. The result is that the plaintiff is unescapably enmeshedIn his contract, and by the operation of clause 6 he must forfeit the partpurchase price he paid. I would therefore allow the appeal and dismissthe plaintiff’s action.
i 2 C. w. R. 45.
Siyaneris v. Petris
399
In regard to costs, the second defendant-appellant will receive thecosts of appeal taxed in the class Rs. 200' and under Rs. 750. He willalso receive in that class costs incurred by him in filing answer. For therest each party will bear his own costs, -for I find that a settlement of thiscase appears to have been prevented by the second defendant-appellantinsisting on his claim in reconvention and that claim has now beendismissed.
Appeal allowed.
Poyser J.—I agree.