083-NLR-NLR-V-14-KIRIHAMY-v.-KIRI-BANDA-et-al.pdf
( 284 )
May 31,1911
Present: Wood Renton J. and Grenier J.
K1RIHAMY v. KIRI BANDA ct al.
133—D. C. Kurunegala, 3,971.
Registration—Pr iority—Mere knowledge of existence of prior unregisteredconveyance does not defeat priority by registration—OrdinanceNo. 14 of 1891, s. 17.
The mere existence in the mind of a man who has obtaineda conveyance for valuable consideration, of knowledge of theexistence of a prior unregistered conveyance, is not sufficient todeprive him of the right to gain priority by registration.KanapathipiUai v. Kannachi 1 explained.
A person who had induced another to buy a land, and who had{inter alia) enjoyed the produce of the land on behalf of the purchaser,
' was held to have been guilty of fraud, within the meaning ofsection 17 of the Registration Ordinance, in taking a conveyancefrom the original grantor and in seeking to gain priority over thatconveyance by registering it.
rj>HE facts are set out in the judgment of Wood Renton J.
Sansoni, for the defendants, appellants.—It has been held in aseries of decisions that a person who with notice of a conveyancealready made for value in favour of a third party lakes a conveyance
1 (1910) 13 N. L. R. 106.
( 285 )
in favour of himself for value and registers it before the earlier May 31, 1911conveyance does not get the deed registered by “ fraud ” within Kirihmvy v.the meaning of the Registration Ordinance. Siripim v. Tikiria,1 Kiri BandaSermaiya Chetty v. Appuhamy,2 Goonesekera v. Goonetilleka,3 2 WalterPereira's Laws of Ceylon, pp. 564 and 565. (Wood Renton J.—Butthe District Judge holds that the fourth defendant had induced theplaintiff to buy the land.) That would not affect the question oflaw ; that fact only proves that the fourth defendant had knowledgeof the earlier conveyance.
The following cases were referred to at the argument : Kana-pathipillai v. Kannachi; 4 Ramanathan, 1877, p. 198.
H. A. Jayewardene (with him Grenier), for the respondent, notcalled upon.
May 31, 1911. Wood Renton J.—
The plaintiff-respondent purchased the shares of the landmentioned in the plaint from the sister of the fourth defendant-appellant on deed No. 13,303 dated November 29, 1887, but did notregister that deed. The property in suit was seized under a writ bythe first, second, and third defendants-appellants against the fourth ;the respondent claimed it, his claim was disallowed, and he there-upon brought the present action under section 247 of the CivilProcedure Code, claiming a declaration that he Was entitled to havethe lands in question released from seizure on the strength of hisconveyance from the sister of the fourth defendant-appellant. Theground on which the property in question was claimed by the fourthdefendant-appellant as his own was a transfer by his own sister inhis favour by deed No. 15,901 dated January 21, 1898. That deedwas duly registered on January 22, 1898. It comes into competetion, therefore, with the plaintiff-respondent’s unregistered deed,and by virtue of section 17 of Ordinance No. 14 of 1891 is entitledto priority, unless the plaintiff-respondent is in a position to show,as he seeks to show in this case, that there was fraud or collusion onthe part of the fourth defendant-appellant in obtaining the deedor in securing the prior registration. I would remark in passingthat the first, second, and third defendants-appellants can be inno better position than the fourth. They could only take suchtitle as the judgment-debtor had to give them, and if by reason offraud his prior registration is deprived of its effects, the claim of theplaintiff-respondent must prevail against them as well as againsttheir judgment-debtor. The sole question that we have to considerin the present case is whether or not fraud in obtaining the deed, orin securing the registration, has been affirmatively proved on behalf
1 (1878) 1 S. C. C. 84.»(1902) 2 Br. 399.
* (1888) 7 S. C. C. Ill,4 (1910) 13 N. L, B. 166,
24-
( 286 )
M<tt, :u, ion 0f the plaintiff-respondent. The learned District Judge has answeredWood this question in the affirmative, and in my opinion his decision isltictfTON J* right.
Kirihatmj v, I would desire to say a few words, first of all, apart from theKiri Handa authorities, and then with special reference to the authorities thathave been cited to us in the argument. We must take the facts as>ve find them stated by the learned District Judge. There is nothingto show that any of his findings upon the evidence are unreliable.That being so, the facts stand thus : The fourth defendant-appellant is the brother of Kiri Menika, through whom heclaims. He was present at the execution of Kiri Menika’s deed infavour of the plaintiff-respondent, and he was not present as a' *merely casual observer. Lt was he who urged the plaintiff-respondent to buy. in addition to that, the deed, after its execution,was put into the custody of his own wife, who is the plaintiff-respondent’s daughter, and the fourth defendant-appellant, equallywith his wife, enjoyed the produce of the lands in question underthat deed. If there is no authority to compel us to come to acontrary conclusion, I should certainly say that a man who hadtaken such a part in the earlier transaction, as has here beenestablished against the fourth defendant-appellant, was guiltyof fraud in taking a conveyance from the original grantor of lands,which he knew perfectly well that she had disposed of to another,
’ and in seeking to gain priority over that conveyance by registeringit under Ordinance No. 14 of 1891.
It is said, however, that there are authorities which show that con-d uct of this kind does not amount to frand, and as there has been somelittle apparent conflict between the views taken by different Judgesin Ceylon in regard to this question, and as we now have had theadvantage of looking into all the most important cases, at any rate,
* bearing on the point, I should like to say something about them. Itappears to me that all the cases which have been cited in support ofthe appellant’s contention go no further than to lay down the propo-sition that the mere existence in the mind of a man who has obtaineda conveyance for valuable consideration, of knowledge of the existenceof a prior unregistered conveyance, is not to deprive him of the rightto gain priority by registration, which the Legislature has expresslysecured to him. It will be found that this point forms the ratiodecidendi in D. C. Kandy, 67,29s.1 It was a decision ofthree Judges : Clarence A.C.J., Dias .J., and Lawrie J. In givingthe judgment of the Full Court, Clarence A.C.J. made use of thefollowing language : “ Each party is standing on his legal right,and we find no grounds on which we can say that either has beentrying to mislead the other. The first mortgagee must be takento have known that if he did not register his incumbrance a secondmortgagee might step in before him. All that is proved respecting
' {1S77) Ham. 1H77. 1 US,
( 287 )
the second mortgagee is that, knowing of the first mortgage, he tookthe legal steps to secure himself: he is not shown to have doneanything underhand or to have made any pretence.” The samepoint arose in Siripina v. Tikiria.1 There Phear C.J. and Clarence J.declined to adopt the view taken by the District Judge of the scopeof the term “fraud” in section 39 of Ordinance No. 8 of 1863,which is substantially identical with section 17 of Ordinance No. 14of 1891, that the mere purchase of land, with the knowledge that thevendor had previously sold to a third person, who had not yetregistered his conveyance, amounts to fraud against that person.“ We think,” said Sir John Phear, “ if this had been the intention ofthe Legislature, it would not have been veiled under the term fraud,but would have been stated expressly. There seems, indeed, to beno fraud in giving full value for the subject of purchase to a person,who, though he may have professed previously to give a title theretoto some one else, is yet designedly left by the Legislature with fullpower to give good title to the subsequent purchaser. Had thepurchaser in the second transaction been party to anything in theway of hindering or delaying the first purchaser in the registrationof his title, for the purpose of securing to himself, the secondpurchaser, priority of registration, then there would clearly be fraudwithin the meaning of the proviso. And it is possible to put manyother cases of the like character.” The language just cited suggestsa point, which it is not necessary to decide at present, whether thewords “ fraud in securing the registration” in section 17 of OrdinanceNo. 14 of 1891 should be interpreted as meaning some fraudulentact in connection with the registration itself. (See, e.g., Crowly v.Bergtheil.1 2 3) In the case of Goonesekera v. GoonetillekeSir JohnBonser C.J., in whose judgment Wendt J. concurs, makes use ofthe following language : “ We cannot accede to the view of theDistrict Judge that notice of the prior instrument at the time ofpaying valuable consideration for a second conveyance or charge issufficient to exclude the party taking that conveyance or chargefrom the benefit of the Ordinance, “ and in support of that he refersto the two cases which I have already cited. It is clear, I think,from Sir John Bonser’s language, that he is speaking of the barefact of notice, and that all that he intended to hold was that thatbare fact was not in itself sufficient to deprive the second purchaserof the benefit of his priority. At the close of his judgment, BonserC.J. says, dealing with an argument which had been addressed to theCourt, ** We do not think it would be right to unsettle principleswhich have been considered as law for many years.”
The only cases that can be cited on the other side are Wijewardenev. Perera* and Brodie v. Anthony/> I respectfully agree with the
1 (187S) 1 S. C. C. 84.(1002) 2 Br. 399..
– (JM0) A. C. 374.1 (1881) 4 8. 8. C, 9t .
3 (1889) 9 8. C. G, 28.
May 31,1911
WoodRenton J.
Kirikamy v.Kiri Banda
( 288 )
May 31,1911
WoodRenton J.
Kirikamy v.Kiri. Bamla
grounds on which Bonser C.J. distinguished those two cases inGoonesekera v. Goonetilleke. The first is no authority at all, for thesecond mortgage was distinctly expressed to be only a secondarymortgage and to be subject to the prior mortgage which it recited.
“ It is quite obvious,” said Bonser C J.*, “ that the registration ofthat secondary mortgage would not avail to give it priority over the
primary mortgage, for the mortgages were not
adverse, and therefore the case was not within the words of theOrdinance.” In Brodie v. Anthony the second mortgage recitedthat some of the mortgaged lands were subject to a prior mortgage.In the case of Kanapathipillai v. KannachiI do not understandmy brother Grenier to have laid down any general rule in a contrarysense. It appears from the terms of the judgment that the seconddefendant-appellant, whose conduct was in question, was himselfan attesting witness to the deed of gift in favour of the plaintiff, andthe transfer deed in favour of the second defendant recites that thedeed of revocation formed a link in the chain of title.
I do not think that there is any real conflict between any of thedecisions to which I have referred. There is one further point as towhich I wish to say a word. As already mentioned, the proviso tosection 17 says that “ fraud or collusion in obtaining such lastmentioned deed” as well as “in securing such prior registration,shall defeat the priority of the person claiming thereunder.” Ifthere were any doubts in the present case as to whether the factsamounted to fraud in securing the prior registration, they disclose,in my opinion, fraud or collusion in connection with the grant of thelater deed, on which the fourth defendant-appellant is bound to rely.
On these grounds I would dismiss this appeal with costs.
Grenier J.—1 agree.
Appeal dismissed.
♦ i
i {1910) 13 *V. & fl. JM,