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Present: Dalton J. and Jayewardene A.J.GODAGE v. DIAS.
81—D. C. GaUe, 23,507.
Partition—Mortgage of- undivided share—Sale of property—Proceeds—Liability of share—Ordinance No. 10 of 1863, s. 12.
Whore land, sold in partition proceedings, was subject to amortgage in respect of an undivided share,—
Held, that the property sold was liable in the hands of thepurchaser to the extent of the undivided share mortgaged.Fernando v. Silva* followed.
f ITHIS was an action brought by the plaintiff to recover a sum of-A Rs. 700 from the first and second defendants, husband andwife, on a mortgage bond No. 4,112 and to have a hypothecary decreeover lots A, B, G, D, E, and F of a land called Wellbroongewatta.The land mortgaged was the undivided half share of lots 2 and 3of Wellbroongewatta and Watteadderaowita. Subsequent to themortgage a partition action wad instituted in respect of the land anda certificate of sale issued. The preliminary decree declared thesecond defendant entitled to one-half plus one-eightieth of the land.The land was sold in lots, and lots A, B, and G were purchasedby the third defendant, the first defendant purchasing lots E and F.1 23 N. L. R. 95.* (1898) 2 Tambyah 111.
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The third defendant pleaded that the mortgage did not attach 1928.to the three lots purchased by him but to the proceeds of sale.p
The learned Judge held that half the blocks dealt with by the Diassale under the decree were liable for the mortgage if the proceedsof sale were insufficient to meet the plaintiff’s claim. The thirddefendant-appealed against this order.
H. V. Perera (with M. G. Abeywardene), for third defendant,appellant.—Section 12 of the Partition Ordinance provides that“ nothing in this Ordinance contained shall affect the right of anymortgagee of the land which is the subject of partition or sale.”
The words “ any mortgagee ” refer to a mortgage of the wholeland (vide Silva v. Wijesinghe1). The proviso to section 12 says thatin the event of a partition or sale the rights of the mortgagee shallbe limited to the share in severalty allotted to his mortgagor.
In the case of a partition the “ share in severalty ” will be ashare in the land, but in the case of a sale such a contention cannotstand. The share in severalty in the case of a sale must necessarilybe a share of the proceeds of sale. The money, in other words,takes the place of the land.
Garvin (with Soertsz), for plaintiff, respondent.—The observationsof de Sampayo J. in Silva v. Wijesinghe (supra) are in directconflict with the finding in Fernando v. Silva:1 De Sampayo• J.’s remarks are obiter. The words “ share in severalty ” aredefined in Stroud, vol. III., p. 1846, and the holder of such a shareis he that holds it in his ” own right only without any otherperson being joined or connected with him in point of interestduring his estate therein.” The word “ severalty ” connotes im-movables. The words “ or sale ” in the proviso to section 12are a mistake. They have been inadvertently inserted (videAbdul Hamidu v. Perera1).
H. V. Perera, in reply.—The definition referred to in Stroudis a definition of the term “ share in severalty " with reference tolands and tenements. The definition does not deal with thecase of money. To say that the words “ or sale ” are a mistakeis no doubt an easy w’ay of getting over a difficulty. But whenthe draftsman introduced those words he meant them, presumably,to have a meaning. Such a meaning has been assigned to thewords, and in the absence of anything to the contrary, the Courtwall accept that meaning.
September 13, 1928. Dalton J.—
Plaintiff sued the first and second defendants (husband andwife) in this action to recover Rs. 700 on a mortgage bond No. 4,112of September 20, 1916, and asked for an hypothecary decree over
1 (1917) SO N. L. R. 147.* (1898) 2 Tambyah 111.
*(1925) 26 N. L. R. 433.
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lots A, B, G, E, and F of a land called Wellbroongewatta. Themortgage was duly registered. The land mortgaged was theundivided half shares of lots 2 and 3 of Wellbroongewatta andWatteadderaowita. Subsequent to the mortgage a partitionaction (No. 19,221, D. C. Galle) was instituted in respect of theland and a certificate of sale was issued dated January 9, 1924.
The preliminary decree declared the present second defendantentitled to £ plus 1/80 of the land. The land was sold in lots,and lots A, B, and G were purchased by the third defendant,the first defendant purchasing lots E and F. The third defendantnow pleaded that the mortgage does not attach to the threelots purchased by him but to the proceeds of sale only.The trial Judge held that half of all the blocks dealt with by thesale under the decree “ are liable for this mortgage if the proceedsof their sale in deposit are not sufficient to meet the plaintiff’sclaim.” He accordingly entered judgment for the plaintiff againstthe first and second defendants for the amount claimed. He thendirected that if realization cannot be had against them and outof the proceeds of sale in deposit to their credit in the partitioncase, one-half of the blocks A, B, G, E, and F will be liable to besold for recovery of a proportionate share of the amount set out inthe decree. The third defendant appeals against this order in sofar as it concerns lots A, B, and G.
The evidence shows that at the time of his purchase third defend-ant had no knowledge of plaintiff’s mortgage, nor is there anythingto show it was referred to in the partition proceedings, or in theconditions of sale.
The question to be considered is, what property is subject tothe mortgage following on the partition proceedings. Section8 of the Partition Ordinance sets out what is to be done upon adecree for sale. It is to be sold to any owner subject to anymortgage or other charges or “ incumbrances ” which may be onthe same.” In the event of no owner becoming the purchaser,it is to be sold “ subject to any such mortgage, charge, or incum-brance ” by public auction to the highest bidder. Section 12 .further enacts that nothing in the Ordinance shall affect the rightof any mortgagee of the land which is the subject of the partitionor sale, and then goes on to provide for the case of a mortgageof an undivided share of the land as opposed to the whole land.If at the time of any sale or partition an undivided share only ofthe land is subject to mortgage the right of the mortgagee shallbe limited “ to the share in severalty allotted to his mortgagor ”under the stipulations of the mortgage bond.
It was first argued for the appellant that section 12 only protectedmortgages of the whole land, as opposed to mortgages of anundivided interest in the land, but this argument seems to me to be
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quite untenable, having regard to the definite wording of the 1988.section. This question was considered in Abdul Hamidu v. Perera,1 dai.ton J.
where it was held that section 12 applies to any mortgage of the
land. De Sampavo J. in Silva v. Wijesinghe- came to a different*'
conclusion on this point, with which Wood Kenton C.J. stateshe was inclined to agree, but Jayewardene J. in Abdul Hamidu v.
Perera (supra) points out that the observations of de Sampayo J.were not really necessary for the decision of that case. If thereare conflicting decisions on this point I have no difficulty in comingto the same conclusion as Ennis A.C.J. and Jajmwardene J. inAbdul Hamidu v. Perera (supra). If there are not conflictingdecisions I respectfully follow the decision in that case.
Section 12 therefore applies to the mortgage in question. Whatproperty then is subject to the mortgage under the provisionsof that section subsequent to the sale ? It will be noticed thatin the first line of the proviso appear the words “ any partition orsale,” whereas the words “ or sale ” do not appear in the last lineof the section. Mr. Garvin argued that the words “ or sale ”where they appear can be given no meaning and that the sectiononly applied to a partition, and the proviso had no applicationhere. That is an easy solution which it seems to me it is impossibleto adopt. There may be an omission of the words “ or sale ”in the last line, but it need not concern the question now to bedecided, which is, to ascertain what is the share in severalty allottedto the mortgagor. By the preliminary decree the mortgagorwas declared to be entitled to J- plus 1/80 interest in tbe land,but having regard to the decree for sale being made, therewas strictly speaking no allotment of any share in severaltyto the mortgagor, although the first defendant is stated to havepurchased lots E and F at the sale. It was urged for appellantthat in the case of a sale the share in severalty could only meanthe share of the proceeds of sale which would come to the mortgagorsin proportion to their interest in the land. There is however ,adecision of this court directly contrary to this argument. InFernando v. Silva3 certain undivided shares of a land had beenmortgaged by two of the co-owners. A sale under the PartitionOrdinance followed. One person then purchased the whole ofthe land. The purchaser then, in an action by the mortgageeon his bond, set up the defence that the mortgagee must undersection 12 look for payment to the proceeds of sale, and that byhis purchase at the sale he had acquired the land free fromencumbrance. The Court rejected this defence that tbe mortgageemust look to the proceeds of sale for payment, referring to theexpress provisions of section 12, adding that there was no goodreason why the same share of the land mortgaged should not be
1 (1925) 26 N. L. R. 433.5 (1917) 20 N. L. R. 141.
3 (1898) 2 Tambijah 111.
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19%. sold in satisfaction of the mortgage. In that case of course theDai/ton J. purchaser bought the whole land, but here he only purchased lots A, B, and G, the first defendant himself purchasing lots E and F.
D%a» On this point also, as to the rights of the mortgagee after a sale,the decision in Fernando v. Silva (supra) is directly contrary to thedecision in Silva v. Wijesinghe (supra). Whether or not Fernandov. Silva (supra) was considered in the latter case does not appear.In discussing these two conflicting decisions the late Mr. JusticeA. St. V. Jayewardene in his Law of Partition, at p. 247, expressesthe opinion that the decision in Fernando v. Silva (supra) appearsto be sounder. He gives his reasons for that opinion, which certainlycommends itself to me, and I would follow the earlier decision.The mortgagee can therefore enforce his mortgage against, in the 'words of Fernando v. Silva (supra), “ the same share of the landmortgaged,” or in the words of Mr. Justice Jayewardene, at p. 247,
“ the share of the land.” These words I assume are intended tobe an interpretation of the words “ the share in severalty allottedto his mortgagor ” as set out in the proviso to section 12.
The question then arises what, in this case, following on theiiole is “ the share of the land mortgaged.” Is it the interestto which the second defendant was declared entitled in the prelimi-nary decree ? If so, how is that interest to be now ascertained ?What share of the land do lots A, B, and G represent ? Do lotsE and F purchased by the first defendant represent, or are theyequivalent to, the interest of his wife, the second defendant, in theland as found by the preliminary decree ?
Further difficulties on these questions are presented from thefact that it appears from the argument put forward in the lower■Court that lots A, B, E, G, and F do not comprise the whole ofthe land sold under the Ordinance. There are other lots whichwere purchased by some of the co-owners. It seems to me thatto decide the question what is the share in severaity allotted tothe mortgagor the case must be sent back to the lower Court forthe facts to be elucidated further by evidence. When that shareis ascertained, the right of the mortgagee, the plaintiff, will belimited to that share in terms of section 12.
The decree of the lower Court will therefore be set aside andthe case referred back for this purpose and for further adjudication.Costs of appeal will abide the event.
According to section 8 of the Partition Ordinance, No. 10 of 1863,a purchaser at a sale held under the Ordinance would buy theproperty “ subject to any mortgage or other charges or incumbrances•which may be on the'same.”
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Section 12 enacts that nothing in the Ordinance “ shall affectthe right of any mortgagee of the land which is the subject ofthe partition or sale.”
In Fernando v. Silva1 it was held that the mortgagee of anundivided share was entitled to have a decree declaring the sharewhich was mortgaged to him bound and executable. The picaof the purchaser that the mortgagee must look for payment fromthe price paid by the purchaser at the sale and that the purchaseracquired the land free from incumbrance was directly raisedand repelled.
The case of Silva v. Wijesinghe2 presents some difficulty. Aspointed out by Wood Benton C.J., the Court was there concernedmerely with a claim to certain portions of the proceeds of the sale,end according to De Sampayo J., the appellant came into Court andclaimed a share of the proceeds. De Sampayo J. was of opinionthat section 12 dealt with a mortgage of the whole land, and WoodRenton C.J., was disposed to agree with that view. It cannot besaid that the point directly arose in that case, as the claim was onlyto a share of the proceeds. In Abdul Hamidu v. Perera* EnnisA.C.J. and A. St. V. Jayewardene A.J. fully considered Silva v.V/ijesinghe (supra) but would not adopt the view therein enunciated.They held that section 12 apph'ed to any mortgage whether ofthe whole land or any undivided share thereof.
The Ordinance conserves the right of any mortgagee of the landwhich is the subject of partition or sale. I am inclined to thinkthat the language is comprehensive enough to include mortgageesof undivided shares as well as mortgagees of the whole land, andI would follow the cases of Fernando v. Silva (supra) and AbdulHamidu v. Perera (supra).
The land sought to be partitioned was sold in several lots, andthe several purchases of the various lots hold those lots subjectto the mortgages on the land, in the proportion of the interestswhich they have purchased. It will be necessary to ascertainwhat proportion the lots E and F purchased by the first defendantbear to the whole land, and whether they represent or are equivalentto the interest of the second defendant, his wife, in the land asallotted to her in the preliminary decree. It will also be necessaryto find what proportion the lots A, B, G purchased by the thirddefendant bear to the whole land and to that extent and in thatproportion the third defendant’s lots will be bound and executableunder the plaintiff’s mortgage decree. In the preliminary decreethe present second defendant was not allotted only a life interest* (189S) 2 Tambyah 111.3 (1917) 20 N. L. R. 147.
3 (1925) 26 N. L. R. 433'
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so that the whole of the interests in the mortgaged property will bebound and executable. The preliminary decree cannot now bealtered, as sales have taken place under it.
I agree to the order proposed. AU costs should, in the circum-stances, abide the event.
GODAGE v. DIAS