049-NLR-NLR-V-06-MEYAPPA-CHETTY-v.-RAWTER.pdf
( 220 )
1903.
January S3and SI.
MEYAPPA CEETTY t>. RAWTER.D. C., Chilaw, 2,216.
Mortgagees—Action by primary mortgagee against puisne incumbrancers—Civil
Procedure Code, ee. 640 and 643—Ordinance No. Id of 1891, s. 17.
There is nothing in the Civil Procedure Code to prevent » primarymortgagee joining a puisne incumbrancer as a defendant in his suit torealize his mortgage.
The plaintiff and the second and the third defendants were mortgageesof the first defendant. Plaintiff’s mortgage was registered, but not thatof the second and third defendants, who put their bond in suit andobtained a decree on 6th April, 1900,which was registeredon 16th
October, 1900. The second and third defendants bought the land inexecution of their decree, butthefiscaldid not give thempossession ’
or a conveyance. The plaintiff bad no notice of this suit, but, havingknowledge of the mortgage in favour of the second and third defendants,which had become subject tohisownby reason of the registration
of his mortgage, sued the first defendant as mortgagor, and joined in thesuit the second and third defendants also.
Held, that plaintiff exercisedawisediscretion in joiningthem as
puisne incumbrancers.
T
HE first defendant granted a mortgage bond to the second andthird defendants in December, 1897. It was not registered.
It was put in suit, and the second and third defendants obtaineda decree against the first on 5th April, 1900. This decree wbbregistered on 16th October, 1900. In execution of it the secondand third defendants purchased the property.
The plaintiff, who was also a mortgagee of first defendant, andwhose mortgage bond was duly registered, had no notice of thatsuit. On 25th September, 1900, he put the bond in his favour insuit against the first defendant and joined in it the second andthird defendants also, though they were not in possession of theproperty.
The District Judge dismissed the plaintiff’s action as against thesecond and third defendants.
Plaintiff appealed. The appeal was argued on 23rd January, 1903.
DornhoT8t, K.C., for appellant.—The plaintiff’s mortgage,though subsequent in date to that of the defendants, is prior to itby registration. The property mortgaged has been bought by thefirst and second defendants. If plaintiff did not join them alsoin his action against the mortgagor, the result would have beenthat while the present case was pending they would have got theirconveyance registered, and such registration would affect theplaintiff prejudicially. By his prior registration, the first andsecond defendants became puisne encumbrancers. Ex abun-danti can tela, the plaintiff has brought his action against the
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puisne incumbrancers. Sections 643 and 641 of the 'Civil Pro- 1908.cedure Code necessitates the joining of secondary mortgagees.
In the circumstances of the present case the plaintiff ought not—,—
to be prevented from safeguarding his interests by the procedurehe has adopted.
Bausa, for the second and third defendants.—The plaintiff hasno cause of action against the second and third defendants. Theyare not in possession. Unless the plaintiff has some ground ofcomplaint against them, they should not be put to the trouble andexpense of defending the suit. The mortgage in their favour isvoid as against him by reason of prior registration. He is entitledto disregard it altogether. The plaintiff has by force of lawbecome a primary mortgagee, and the second and third defendantshave become secondary mortgagees. They did not give himnotice under section 243 of the Code. The Code does not contem-plate a secondary mortgagee being joined at all. In practice sucha procedure is unknown. Supposing a simple money decree-holder against the first defendant had bought the land, would theplaintiff have a cause of action against him?
Cur. adv. vuIt.
27th January, 1903. Layakd, C.J.—
The admitted facts of this case are as follows:—The plaintiffand second and third defendants are mortgagees. Plaintiff’smortgage was duly registered. The second and third defendantshave not registered their mortgage. They put their bond in suitand obtained a decree on the 5th April, 1900, which was registeredon the 16th October, 1900.. In execution of that decree the landmortgaged was sold and purchased by the second and thirddefendants, but no conveyance has been made to them by theFiscal.
The District Judge has decided that the plaintiff was wrongin making the second and third defendants parties in this actionbrought by him against the first defendant, the mortgagor, torealize his mortgage, because the title of the first defendant inthe land mortgaged is not vested in the second and the thirddefendants, and they are not in possession of it.
It is contended for the plaintiff appellant that the second andthird defendants are puisne incumbrancers, and that the plaintiff,as first mortgagee, having notice of such puisne incumbrance,is entitled to join them as parties to this suit. The respondent’scounsel, however, contends that as the second and the thirddefendants have not registered their mortgage, their mortgage,is void as against the plaintiff’s subsequently registered mortgage,under the provisions of section 17 of Ordinance No. 14 of 1891.
( 222 )
1908.
January 23and 27.
Layakd, C. J.
It is clear, however, from the last part of the proviso to thatsection, that the provisions of it merely confer priority on thesubsequent duly registered instrument, and the second and thirddefendants thereby become puisne incumbrancers. It was laiddown by Mr. Justice Clarence in the case of the Oriental Bankv. Rogers (4 8. C. C. 1) that a first mortgagee, who had noticeof puisne incumbrancers, ought to make such puisne incumbrancer*parties to his suit to realize his mortgage. It has however beensuggested that since the passing. of the Civil Procedure Code thepuisne incumbrancers cannot be made parties on actions to realizemoneys due or secured upon mortgages. Section 640 of thatCode provides that the mortgagor shall be made a party, andsection 643 provides for puisne incumbrancers, whose deeds areof date subsequent to that of the mortgage on which the action isbrought, being noticed under certain circumstances, and it maybe that, unless those circumstances are complied with, a puisneincumbrancer, whose deed is of subsequent date to that of themortgage on which the action is brought, would have no right tocomplain if not noticed in manner provided by that section.The puisne incumbrancers in this case claim, however, under amortgage prior in date to that of the plaintiff, and section 643does not refer to a mortgage of a prior date. Prior to the passingof the Civil Procedure Code, according to the judgment ofMr. Justice Clarence above referred to, the primary mortgageewas bound to join in his action to realize his mortgage any puisneincumbrancer of whom he had notice, and consequently a puisneincumbrancer was a proper person to be made a party to suchsuit. The sections in the Civil Procedure Code above referred todo not enact that after the passing of the Code no puisne incum-brancer shall be made a party to an action by a primary mortgagee.It may be that in certain cases after the passing of the Code apuisne incumbrancer cannot claim to have notice given to him ofan action to realize a primary mortgage; there is nothing, however,
in the Civil Procedure Code to prevent a primary mortgageejoining a puisne incumbrancer, should he think it desirable to doso, and I cannot see what the puisne incumbrancers have tocomplain of in being joined in this action. The plaintiff, .in myopinion, has exercised a wise discretion in joining the puisneincumbrancers as parties to his action.
The judgment of the District Judge is set aside, and the res-pondents must pay the appellant’s costs in this Court and theDistrict Court, and the case must' proceed against all threedefendants.
•Moncreiff, J.—I agree.