KULASEKERE APPUHAMY v. MALLUWA

044-NLR-NLR-V-28-KULASEKERE-APPUHAMY-v.-MALLUWA.pdf


( 246 )
1926.
Present: Garvin A.C.J. and Dalton J.
KULASEKERE APPUHAMY v. MALLUWA.
72—D. C. Negombo, 328.
Assignment of mortgage debt—Hypothecary action—Pending the decree—Assignee's right to substitution—Civil Procedure Code, s. 404.
– Where, after the decree had* been entered in a hypothecary action,the mortgage bond, upon which the action was raised, was assignedby the Fiscal in pursuance of a sale in execution against theplaintiff.
Held, that the assignee was not entitled to have himself substi-tuted as plaintiff in the action.
HE plaintiff as mortgagee of certain lands under bond No. 251)
dated September 25, 1922, instituted a hypothecary actionagainst the mortgagor on June 16, 1925. Decree was entered in hisfavour on September 15, 1925. Meanwhile in pursuance of a writissued in another case against the plaintiff the Fiscal seized and sold,and by a writing dated September 22, 1925, assigned to one JagalisFernando, the purchaser, “ the following movable property—mort-gage bond No,. 259, dated September 25, 1922.’* Jagalis Fernandoapplied to have himself substituted in place of the plaintiff. Thelearned District Judge allowed the application.
Keuneman, for plaintiff, appellant.
H. V, Perera, for respondent.
July 21, 1926. Garvin A.C.J.—
The plaintiff as mortgagee of certain lands under a bond No. 259,dated September 25, 1922, instituted on June 16, 1925, a hypothecaryaction against the mortgagor in the District Court of Negombo.Decree was entered in his favour on September 15, 1925.. In themeantime in pursuance of a writ issued in case No. 7,502 ;of the Courtnf Requests of Colombo against the plaintiff the Fiscal seized andsold, and by a writing dated September 22, 1925, assigned to oneJagalis Fernando, the purchaser, “ the following movable property—mortgage bond No. 259, dated September 25, 1922.” JagalisFernando on February 9, 1926, applied to the District Judge ofNegombo to be substituted in place of the plaintiff, whose interestin the mortgage bond in suit he claimed to have acquired under andby virtue of the sale and assignment in pursuance of the writ issuedin Court of Requests, Colombo, No. 7,502.
T
( 247 )
The District Judge granted the application and directed that hebe substituted. From this order the plaintiff appeals.
There is nothing on record to indicate the procedure followedin the seizure and sale of this bond which was, at all material dates,filed of record in the hypothecary action then pending in the DistrictCourt of Negomho. It appears to have been assumed that the salewas regular and that the subject of the sale was the bond and theplaintiff’s interests therein. It was contended, however, that thepetitioner acquired no title to the subject of sale until the assignmentin his favour was executed by the Fiscal, and that inasmuch as thatassignment took place after decree this is not a case of the assign-ment of any interest “ pending the action ” within the meaning ofsection 404. The procedure to be observed in the sale of movableproperty is contained in section 274 of the Civil Procedure Code andthe following sections.
1926.
Garvin
A.C.J.
Kulaaekere
Appuhamy
v.
Malluwa
It is provided by section 275 which applies to the sale of movableproperty other than negotiable instruments and shares in publiccompanies or corporations that “ on payment of the purchase money,the officer holding the sale shall grant a receipt for the same, and thesale shall become absolute. ** Section 277 which relates to negotiableinstruments and other movable property of which actual seizure hasbeen made requires that the property shall be delivered to thepurchaser. Section 278 enacts, with reference to the property ofthe judgment-debtor in the lawful possession of another, that deliveryshall be made by notice to the person in possession prohibiting himfrom delivering the property to any person except the purchaser.And section 279 which applies to a debt not secured by a negotiableinstrument requires that the assignment thereof shall be in writingsigned by the Fiscal who is required forthwith by written noticeto prohibit the creditor from receiving the debt and the debtorfrom making payment to any person except the purchaser.
Whether such notices were issued in this case we do not know, butit is assumed that this case is governed by section 275 and section279 and that all the requirements of the law relating to the sale of adebt have been observed.
We have to determine at what date the plaintiff’s interest in thisbond passed to the purchaser. Was it when the purchase moneywas paid or did he remain vested with his rights till he was divestedby the formal assignment by the Fiscal ?
The series of sections commencing with section 274 and endingwith section 281 require that there shall be a sale, and thereafterdelivery, and in the case of property not capable of actual deliverythe execution of a formal document of title. The general scheme isthat there shall be a Sale followed and implemented by deliveryactual or constructive for the purpose of vesting the purchaserwith the title to the property sold. Section 281 states in express
( 248 )
terms that in respect of any movable property not provided forthe Court may make order and “ execute such documents as maybe necessary vesting such property in the purchaser, or as he may
Kultutkere direct, and such property shall vest accordingly.”
Appuhamy
«•That section is based on the assumption that title does not vest
MaUutoasaje an(j payment of the purchase price, but that a further
step is necessary for that purpose.
The group of sections makes a distinction between the completionof the sale and its consummation the passing of the property , in thethings sold by delivery or its equivalent. In this view the petitionercan only claim to be assignee of the plaintiff’s interests in the mort-gage bond from the date of the formal assignment which was madeon September 25, 1925. At that time those interests had beenconverted into a decree. Now section 404 enables a person to whomthe interests of a party plaintiff have come by assignment pendingthe action to have himself substituted for the plaintiff and continuethe action for his benefit.
The interests (if any) which came to the petitioner under thisassignment came to him after decree. If the words “ pending theaction ” mean “ before final decree ” the petitioner is clearly notentitled to the benefits of section 404. It is contended that thewords “ pending the action” do not necessarily mean before finaldecree, that they must be construed with reference to the natureof the action and that a hypothecary action is pending till at leastthe sale of the property hypothecated has taken place. The casesof Silva v. Lokumahatmaya 1 and Sarawanamuttu v. Solamultu 2were referred to. But these cases merely decided that in the case ofhypothecary actions the doctrine of lis pendens operates even afterjudgment and up to the conclusion of execution. We are not hereconcerned with the rule of lis pendens but with the correct con-struction of certain words which appear in section 404 of the Codeof Civil Procedure.
In the case of Gooneratne v. Perera 3 the point was fully consideredby Bonser C.J. After a careful examination of the chapter of whichsection 404 is a section and the provisions of section 339 and 341of the Code, His Lordship came to the conclusion that the words” pending the action ” in section 404 mean “ before final decree.With this decision Withers J., the other member of the Bench,agreed.
Section 404 deals with the case of assignments before final decreeand enables the assignee after substitution to continue the action.Assignments of the decree are referred to and dealt with in section339.
1886.
Gahvxn
A.GJ.
1 (1920) 22 N. L. R. 184.* (1924) 26 N. L. R. 385.
(1896) 2 N. L. R. 185.
( 249 )
The rights (if any) which passed to the petitioner upon the docu-ments he relies on were assigned to him after the final decree hadbeen entered.
Counsel for the respondent referred to the case of Ckunni Lai v.Abdul Ali Khan.1 This case does not carry his argument anyfurther. It is an authority for the proposition that a decree madeunder the Transfer of the Property Act, 1882, being only a decreenisi and not a final decree an assignee of such a property may bemade a party under section 372 of the Indian Code of Civil Pro-cedure which is substantially the same as our section 404. Thehypothecary decree in Ceylon is a final decree and not a decree nisi.
The case of Goodall v. Mussoorie Bank, Lid. 2 is clearly againstCounsel’s contention and is in accordance with the view taken byBonser C.J. of the true meaning of section 404. The ruling in thiscase was that the words “ pending the suit ” in section 372 of theIndian Act meant “ during the progress of the suit and before thepassing of the decree.
The corresponding words of section 404 are “ pending the action ”and, in my judgment, mean during the progress of the action andbefore final decree.
The judgment of the District Judge is set aside, and the appealallowed with costs in both Courts.
Dalton J.—I agree.
Appeal allowed.
1 (1901) I. L. B. 23, All. 381.* (1387) I. L. B. 10 All. 97.
1988.
Gabvin
A.C.J.
Kulasekere
Appuhamy
v.
MdUuwa