102-NLR-NLR-V-39-DIAS-v.-DE-SILVA.pdf
FERNANDO A.j.—Dias v. de Silva.
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1937Present: Moseley J. and Fernando A.J.
DIAS v. DE SILVA.189—D. C. Galle, 34,124.
Merger—Action on mortgage bond—Assignment of bond to son of mortgagor—Re-assignment to mortgagee—Merger of breditor and debtor—Roman-Dutch law.
The principle of the Roman-Dutch law that a debt is extinguishedwhen the title of the creditor and debtor becomes united in the sameperson by operation of law does not apply in Ceylon.
A PPEAL from a judgment of the District Judge of Galle.
N. E. Weerasooria (with him H. A. Wijemanne), for second defendant,appellant.
H. V. Perera, K.C. (with him E. B. Wikramanayake), for plaintiff,respondent.
Cur. adv. vult.
June 10, 1937. Fernando A.J.—
The plaintiff instituted this action to recover the sum of Rs. 3,500 asprincipal, and Rs. 3,500 as interest due on mortgage bond dated July,1925, executed by Louis Appu who died on December 15, 1926, leavingtwo children Charles Silva and Mai Nona. Charles Silva himself diedleaving a child Ariyapola for whom Henry Dias the administrator of theestate of Charles Silva had been appointed guardian ad litem. Theplaintiff instituted this action against the administrator of Charles Silva'sestate, and the guardian ad litem of Ariyapola to recover/ the amount dueon the mortgage bond.'
It would appear that in 1931, the plaintiff assigned the bond to thesaid Charles Silva, and Charles Silva re-assigned the bond to the plaintiffon October 7, 1934.
Counsel for the appellant contended that the administrator of CharlesSilva’s estate had not been properly appointed, inasmuch as the properstamp on the value of the mortgaged, property had not been affixed to theletters of administration. No doubt where a person is appointed adminis-trator of the estate of the debtor on a mortgage bond merely for thepurpose of recovering the money due on the mortgage bond, it has beenheld that duty should be paid on the value of the mortgage action, butat the same time where a person is administrator of the estate of another,the stamp duty would be governed by-the value of the estate as adminis-tered, and if it is found that the immovable property belonging to theestate is subject to a mortgage, then the amount of the mortgage debt isset off against the value of the estate, and the stamp duty is payable,according to the nett value of the estate. In such cases the questionwhether stamp duty had been properly paid or not would depend noton the value of the mortgaged property, or on the value of the mortgage,
FERNANDO A.J.—Dias v. de Silva.
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but on the nett value of the estate. I do not think, therefore, that thereis much substance in the contention with regard to the stamp duty onthe letters of administration.
It was also argued that the mortgage bond was of no effect becauseCharles Silva was at one time the debtor as well as the assignee of themortgage bond. The argument is that on Louis Appu’s death, his heirswere his two children Charles Silva and Mai Nona, dnd when in 1931,the plaintiff assigned the bond to Charles Silva, Charles Silva became thecreditor as well as the debtor on that bond. It is no doubt clear thatwhere the same person is debtor and creditor, the debt ceases to exist bythe principle of law termed Merger or Confusio, but this principle willonly apply in a case where the creditor does become the debtor by opera-tion of law. Under the old Roman-Dutch law the heir of a deceasedperson succeeded to his assets and to his liabilities, but that does notapply under our law. As Walter Pereira states in the Laws of Ceylon{2nd ed.), p. 460, “by the Charter of 1833, District Courts in Ceylonwere given the power to appoint administrators to the estates of deceasedpersons and to grant probates of Wills to executors named therein, andit has been held by this Court that it was implied by the Charter that thewhole of the English law as to executors and administrators was to beobserved in Ceylon. The testamentary heir under the Roman-Dutchlaw has thus been completely superseded by the executor or adminis-trator ‘ cum testamento annexe ’ under the English law, the resultbeing that the application of the term ‘ heir ’ to any person taking undera will would be misleading. While under the old state of things, thosewho took under wills were the heir or heirs and legatees, there is no suchdistinction to be "observed now, and all who take under wills would now■properly fall under the designation of ‘ devisees ’. Some of the practicalconsequences of this supersession are as follows :—No devisee, universalor otherwise, under a will incurs, by accepting the devise, liability to paythe debts of the testator, and the processes known as the Act of Delibera-tion and Benefit of Inventory referred to above have thus become un-necessary.
'■ When the heir adiated the inheritance ”, he says at page 460, “ he wasclothed with the whole legal persona of the deceased. He possessed hisproperty and became liable for his debts and obligations to the extentof even beyond the value of the estate. The testamentary heir wasallowed certain safeguards against personal loss. The first of these wastermed the Act of Deliberation, and the second, Letters of Benefit ofInventory which secured for him complete immunity from all liabilitybeyond the value of the actual assets of the estate.”
Dealing with the question of Merger or Confusio, Nathan in CommonLaw of South Africa, vol. 11., ait p. 652, states that merger whereone person inherits from another, takes place in all the foregoing casesonly where one has not obtained the benefit of inventory, that is, whereone is a universal successor without the benefit of inventory. He who isheir pure and simple according to the Roman-Dutch law acquires allrights and liabilities of the deceased and, in case of succession to hiscreditor or debtor, is understood as paying himself or as receiving paymentfor himself, but the benefit of inventory absolves one from liability for39/28 '
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FERNANDO A.J.—Dias v. de Silva.
all the liabilities of the estate, and makes one liable only to the amountinventorised. Persons who adiate and accept benefits under a willwithout obtaining the benefit of inventory will fall under the rules as tomerger which have been stated above. It would follow, therefore, thatin Ceylon where the benefit of inventory is no longer necessary and whereeven a testamentary heir does not become liable for all the debts of thedeceased, the principle of merger will have no application.
1 see no reason, therefore, to interfere with the finding of the learnedDistrict Judge who held in favour of the plaintiff and entered judgmentfor the plaintiff as prayed for with costs. That order is affirmed andthis appeal is dismissed with costs.
Moseley J.—I agree.
Appeal dismissed.