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Present: Dalton and Akbar JJ.
GIBIGOBIS v. ABNOLIS et al.
312—D. C. Ratnapura, 4,912.
Registration—Sale of property under mortgage decree—Non-registrationof a mortgage action and decree—Alienation .by mortgagor—Priorregistration of transfer—Ordinance No. 21 of 1927, s. 11 (/).
Plaintiff claimed title to the land in question on a Fiscal’stransfer registered on October 5, 1926, issned in execution of adecree in' a mortgage action brought upon a 'bond registered onJanuary 13, 1919. Neither the mortgage action nor the decreenor the seizure of the land was registered.
Defendants derived title from a sale by the mortgagor datedJune 21, 1926, and registered’on June 22, 1926.
Held, that the defendant’s title prevailed subject to plaintiff's-right to compensation for the amount' of the mortgage, in accordancewith the principle laid down in section 11(1) of Ordinance
.No. 21 of 1927.
^^PPEAL from a judgment of the District Judge of Ratnapura.
The facts appear from the judgment.
N. E. Weerasooria, for defendants, appellants.
H. V. Perera (with Amarasekera), for plaintiff, respondent.
February 19, 1930. . Akbab J.—
This appeal raises the often-recurring point when there are twocompeting deeds to a land: one derived from a sale in a mortgageaction and the other fromthe mortgagor.The appeal was
substantially pressed on one point of law, namely, .that the deed infavour of the defendants (D I) was to be preferred in law to the Fiscal’stransfer in favour of the plaintiff (P 1). No evidence was led in thecase, but certaindocumentswere put in byboth parties arid
judgment was delivered on the argument of counsel on thosedocuments. Thisappeal must therefore bedecided on these
materials. The plaintiff sued the defendants for declaration of titleto certain shares of land sold to him on a Fiscal’s transfer (P 1)dated October 3, 1926, and registered on October 5, 1926, issued tohim in execution of a mortgage action brought upon a bond (P 2)dated January 2,1919, and registered onJanuary 13, 1919.
Neither the mortgage action nor the mortgage decree, nor the seizureof the land preparatory to the issue of Fiscal’s transfer (P 1)was registered. P 1 recites that writ was issued on July 17, 1925,that the sale took place in September 15, 1925, and that the Courtconfirmed the sale on December 12, 1925. First defendant derived,title to the shares dealt with in P 1 by D 1, which was a sale by “
16J. N. B 11394 (10/51)’
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the mortgagor on P 1 (among others) dated June 21, 1926, andregistered on June 22, 1926.
It will be .thus seen that D 1 was executed and registered priorto P 1 and that three vital steps which a mortgagee should take toprotect his interests and those of the purchaser at the execution salewere not taken, namely, registration of the lis pendens, of themortgage decree, and of the seizure.
As pointed out by the Supreme Court in Saravanamuttu v. Sola-muttu1 and Adappd Chetty v. Babi,2 a mortgage decree requiresregistration. The decree having been entered on August 7, 1924,and not being registered has to give way to D 1 executed andregistered in June, 1926. Therefore P 1 which depends on themortgage decree must give way to D 1. Mr. Perera, for the respond-ent, argued that plaintiff, who bought at the Fiscal's sale onSeptember 15, 1925, did.so because there was no adverse deedregistered in the encumbrance sheets, and that the principle statedby me above should not be applied, whereas in this case defendants*deed was after execution. But the plaintiff should have known ofthe non-registration of the lis pendens, the decree, and the seizure.It is true that the first-named case cited by me above referred to apurchaser who bought between judgment and execution. But inthis case the Fiscal's sale, although confirmed in December, 1925,was not completed by issue of the transfer till October 3, 1926*nearly four months after D 1, and the plaintiff, on whom lay theburden of proof, has not led any evidence to prove that satisfactionof the mortgage decree was entered before D 1 was executed.Even if satisfaction was entered diter D 1 was executed, this onlymeans the extinction of the mortgage decree, and the two competingdeeds left will be D 1 and P 1; D 1 being executed and registeredprior to P 1. In my opinion the judgment of the District Judgewho purported to follow the cases referred to in Jayewardene'sLaw of Registration, pp. 101-3, is wrong, as will be seen from the latercase of Anohamy v. Hantffa. 3 This does not, however, conclude tJiecase, because when D 1 was executed the mortgage bond (P 2) wasregistered and first defendant had notice of it. As a result ofthe mortgage action and P 1 the mortgage has been wiped ou.t,and first defendant should compensate plaintiff for this. Thisprinciple was recognized in the case last mentioned by me, andlegislative sanction has been given to it by section 11 of OrdinanceNo. 21 of 1927. By sub-section (2) of that section, sub-section (1)is to apply even to sales effected before that Ordinance. Theamount due on the mortgage bond (P 2) is Rs. 50. Defendants aretherefore entitled to succeed, subject, however, to the payment ofRs. 50 by them/
i 26 A L. R. 385.2 25 X. h. R. 284.
3 25 N. L. R. 289.
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Mr. Weerasooria did not seriously press his second ground ofappeal, namely, that his clients were not liable to pay even thisBe. 50 because D 1 was executed to pay off the stamp duty in thetestamentary case referred to in D 1, but I do not think he is entitle?to succeed on this point, as the burden of proof on this ground wason the defendants, and they have led no evidence on which this pointcan be decided. Moreover, issue (4) as framed does not cover thispoint as raised at the appeal.
The appeal is allowed and plaintiff’s action is dismissed withcosts in both Courts, but defendants will pay Bs. 50 to the plaintiff.
Dacton J.—I agree.