009-NLR-NLR-V-70-M.-W.-A.-P.-JAYATILLAKE-Appellant-and-P.-G.-SOMADASA-Respondent.pdf
JI. X. G. FERNANDO, C.J.—JayatiUake v. Somadasa
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1967 Present: H. N. G. Fernando, C.J., and Sirimane, J.M. W. A. P. JAYATILLAKE, Appellant, and P. G. SOMADASA,
Respondent
S. C. 83165—D. C. Badulla, 3304 jM.B.
Partition action—Mortgage by a party pendente lite of the interest that will be allottedto him in the final decree—Mortgage not specified in subsequent final decree—Right of the mortgagee to sue on the bond—“ Encumbrance ”—Partition Act{Cap. 69), ss. 5, 12, 19, 48,67, 70.
Section 67 of the Partition Act has not altered the position which prevailedunder the former Partition Ordinance that the prohibition against the alienationor hypothecation of an undivided share or interest pending a partition actiondocs not prevent a party from disposing, during the pendency of the action,of the interest that will be ultimately allotted to him in the final decree.
An interest which vests only upon entry of the final decree is notcontemplated in the term “ encumbrance ” in section 48 of the Partition Act.Accordingly, where, after interlocutory decree has been entered in a pendingpartition action and before the final decree, a party mortgages the interestthat will be allotted to him under the final decree, the mortgagee will be entitledto sue on the mortgage bond after the final decree is entered, even if theinterest mortgaged is not conserved in the final decree. In such a case, itcannot be contended that tho final decree is free from the” encumbrance” ofthe mortgage.
A.PPEAL from a judgment of the District Court, Badulla.
Nimal Senanayake, for Plaintiff-Appellant.
Bala Nadarajah, with N, J. Abeysekera, for Defendant-Respondent.
Cur. adv. vult.
June 20,1967. H. N. G. Fernando, C.J.—
This is an action for a hypothecary decree upon a mortgage bond bywhich the defendant had mortgaged to the plaintiff “ all my right, title,interest claim, demand advantages and disadvantages whatsoever thatI would be declared entitled to by virtue of the Final Partition Decreein case No. 13026 of the District Court of Badulla in to from, andout of all that and those the contiguous lands called and known as‘ Kadewatte ’ The bond was executed after interlocutory decree forpartition had been entered in the pending partition action, but beforethe final decree.
The defendant took two defences. One was that the mortgage wasvoid under s. 67 of the Partition Act (Cap. 69) as having been executeddining the pendency of the partition action. This defence was rightlyrejected by the learned District Judge. Section 67 has not altered theposition which prevailed under the former Ordinance that the prohibitionagainst the alienation or hypothecation of an undivided share or interestpending partition does not prevent the changing or disposing of theinterest to be ultimately allotted to a*party in the pending action (KahanBhai v. Perera)J.
J (1923) 26 N. L. R. 204.
LXX
l*.
•H 7947—2,075 (10/67)
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H. N. G. FERNANDO, C.J.—Jayatillake v. Somadata
The other defence taken in this case was that (in terms of s. 48 of thePartition Act) the right awarded to the defendant in the partition actionis free of all encumbrances and that a mortgage executed in the intervalbetween the entry of the interlocutory decree and the entry of the finaldecree is an “ encumbrance ” within the meaning of s. 48. The learnedDistrict Judge has upheld this contention and has held that, since themortgage was not specified in the final decree, the right of the defendantas declared in the final decree is free of this encumbrance.
In Karunaratne v. Perera 1 this Court rejected the argument that adonation pending partition of the interests to be allotted to the donorin a partition action will be wiped out by the final decree if the interestdonated is not conserved in the final decree. Sansoni, C.J. statedsuccinctly his opinion :—
“ We are unable to accept this submission, because we take the viewthat the interests referred to in s. 48 of the Partition Act are interestswhich are presently vested in the grantee, and do not include interestswhich have not already vested even in the grantor. We see nodifference in this respect between the provisions of the old PartitionOrdinance and the new Partition Act. ”
I agree entirely with that opinion, but the arguments of Counsel inthis appeal render it desirable to state my reasons for so agreeing.
Section 5 of the Partition Act requires the plaintiff in a partition actionto include in the action, as parties, all persons who to his knowledge areentitled or claim to be entitled “ to any right, share, or interest to, of,or in the land to which the action relates, whether vested or contingent,and whether by way of mortgage, lease, usufruct, servitude, trust, fidei-
commissum, life interest, or otherwise, or”. Section 12 of the Act
provides for the joinder in the action (by an amended plaint) of personsdisclosed upon inspection of the land register to be persons who shouldhave been, but were not, joined as parties in the original plaint. Section19 requires every defendant to disclose the names of every person who tohis knowledge has any right, share or interest in the land, but who hasnot been joined as a party. Section 70 permits the Court, at any timebefore the entry of the interlocutory decree, to join persons as partiesto the action.
The provisions of the Act which I have just mentioned afford amplescope for the joinder or intervention of persons who might have interestsin the corpus of a partition action, and for the determination ordeclaration of such interests by the Court; and the justification forthe provision in s. 48, which “ napes out ” certain interests unless theyare specified in the decree, is that by and large thuse provisions givethe holders of such interests adequate means to prou ct themselves byparticipation or intervention in the action.
i (1965) 67 N. L. It. 529.
The Queen v. Jojrest Perera
2?
But since intervention is not permissible after interlocutory decree hasbeen entered, a person (like the plaintiff in this case) who acquires someinterest after that stage cannot intervene in order to have that interestspecified in the final decree. And if an interest so acquired must beregarded as an “ encumbrance ” within the meaning of that term in s. 48of the Act, the holder of the interest will be quite powerless to preventthe extinction of the interest. I cannot ascribe to the Legislature anintention so harsh and unreasonable.
Where there is a dealing by a party with “ the divided lot to be allottedto him ” in a pending partition action, the transaction becomes effectiveto vest rights in the alienee only after the interest is in law allotted to theparty, i.e., only at the stage when the final decree is entered ; at that stagethe lot allotted to the party becomes for the first time subject to therights arising by virtue of the transaction. Hence I respectfully agreewith Sansoni, C.J., that an interest which vests only upon entry of thefinal decree is not contemplated in the term “ encumbrance ” in s. 48.
I should add that this construction does not affect the finality of afinal partition decree. The law as to the registration of interests affectingland secures that a person like the mortgagee in the present case mustduly register his mortgage if it is to prevail against persons who in thefaith of the final decree acquire interests from those to whom dividedlots are allotted in the final decree.
The appeal is allowed with costs. The District Judge will enterhypothecary decree as prayed for in the plaint. S
Sr.Rivi4.*rE, J.—I agree.
Appeal allowed.