MUHEETH v. NADARAJAPILLA et al

114-NLR-NLR-V-19-MUHEETH-v.-NADARAJAPILLA-et-al.pdf


( 461 )
1917.
[Full Bench. ]——
Present: Wood Renton C. J. and Shaw and Be Sampayo JJ.
MUHEETH v. NADARAJAPILLA et al.
41^D. C. Colombo, 45,446.
V
Lis pendens—Action on a mortgage bor^d—Lease by a mortgagor beforeservice of summons but after institution of action.
A lease by a mortgagor after the institution of an action on themortgage bond by the mortgagee, but before service of summonson him, cannot be regarded aB having been executed pendente lite.A lis pendens arises only upon the service of summons, so asto affect any dealing with the subject of litigation by the party. defendant.
The rule of lis pendens applies as much to a mortgage action asto any other action relating to immovable property.
rjlHE facts are set out in the judgment.
Bawa, K.C., and Samarawickrema, for plaintiff, appellant.
A. St. V. Jayewardene, for defendants, respondents.
Cur. adv. vult.
June 19, 1917. Wood Renton C.J.—
The argument of this appeal has been inevitably delayed by thesimultaneous absence of my brother Be Sampayo and myself oncircuit. The material facts are these. Florence Casie Chetty andher husband, by deed No. 110 dated November 8, 1912, mortgagedto T. A. J. Noorbhai an undivided one-third of the premises No. 15,Fourth Cross street, in the Pettah of Colombo, to which she wasentitled. On November 14, 1918, the mortgagee put the bond insuit, and, in execution of the decree in that action, the propertywas, on December 3, 1914, sold by the Fiscal and purchased by theplaintiff, who obtained a Fiscal’s transfer on July 19, 1915. Afterthe filing-of the plaint, but before the service of the summons, inthe mortgage action, Florence Casie Chetty , by deed No. 2,975dated October 25, 1913, leased the property to the defendants fora period of four years, commencing from March 1, 1915, at an annualrent of Rs. 750, a sum of Rs. 1,580 being payable as an advance.The plaintiff sues in this action for a declaration of his title to theproperty and for the recovery of damages from, and the ejectment .of, the defendants, who, he alleges, have been in wrongful posses-sion of the property since December 3, 1914. The defendants intheir answer relied upon the lease above mentioned, pleaded that-
( 462 )
MIT. they had also taken a lease of the remaining two-thirds of thtf-premises—their title under this lease was admitted at the trial-f-Rbot^h C.J. and contended further that the action was not maintainable, asMuheeth v. they had not received notice of it from the plaintiff.
Nadaraja- The main,issue in this oase is whether or not the lease by FlorenceCasie Chatty of the one-third share in suit should be regarded ashaving been executed pendente lite. That question in turn dependson the point of time at which, under the law of this Colony, anaction may be said to be “ pending." The learned District Judge,following the decision of Middleton and* Grenier JJ. in Perera v.Silva * held that there is no Its pendens till knowledge of theaction has been brought hofne to the defendant by service ofthe summons, and consequently that as the defendants had not in,fact been served with summons when the lease was executed, theplaintiff, while he had a right to a declaration of title to his admittedinterests in the premises, could not recover damages against them.
On this part of the oase I entirely agree with the learned DistrictJudge. While it is no doubt true, as was pointed out by the Courtof Appeal in Chancery in Bellamy v. Sabine,•* in passages so wellknown that it is unnecessary to cite them at length, that a liependens affects a litiga'nt, not through the doctrine of notice, butbecause the policy of the law will not allow a litigant to creatependente lite rights to the property in dispute to the prejudice ofhis opponent, the law of England has never excluded the questionof notice from consideration in this matter. The theory on whichthe effect of lis pendena rested was that the proceedings in courtsof justice enjoyed such publicity asto import notice,8and,;
under the law prior to the Judgments Act, i839,4 it was only onservice of the subpoena that a lie pendens was constituted. The ■Judgments Act, 1839,4 only made this difference in the law that,in order to bind a purchaser or a mortgagee, either he must hav^express notice of the action, or the lie pendens must be registered.The Boman-Dutch law proceeded onthe same principle.An1
action became litigious, if it was in rem, as soon as the summonscontaining the cause of action was served on the defendants; if it?was in personam, on litis contestation which appears to synchronizedwith the joinder of issue or the close of the pleadings.®w!
I do not think that the Indian authorities discussed in th$‘argument of the appeal are- of much assistance in the ascertain-ment of the law of Ceylon on the point now under consideration,'inasmuch as they all turn on the language of section 52 of theTransfer of Property Act, 1882,7 • which prohibits the transfer of
1 (1910) 18 N. L. R. 81.* 3 d 8Viet., eh. 11, S- 7.
(1867) 1 De O. and 3. 668.* Sandeon Cession of Actions (Anders)
See Worsley e. Scarborough, 8 Aik. 66; Maas. vol. 4, p. 226.
892;. Price v. Price,(1887) 85 • Berwick's Voet 890; 4 Nathan
Ch. D. 297, at p. 301; Wigram v. 1994.
Buckley, (1894) 8 Ch. 483.7 Act IV. of 1882.
( 463 )
pitta
umdBvable property, the subject of a contentious suit or proceeding, 1917.dnriflg “ the active prosecution of any such suit in Court. ” A woodapt may well have a “contentious ’’ character impressed upon it Renton C.J.before the service of summons. In this eonection I may quote jauheeth v.
the language of Maclean C.J. in the case of Jogendra Chunder Nadaraja-
(£h*4e v. TuVkumari Dasst:1 “It is said, upon the authority of thee$gg[ of Radhasyam Mohapatbra v. Sibu Panda,3 that a suit does. npf become * contentious ' until the summons has been servedupon the opposite* party, but no reason is assigned by the learned■Judges for their conclusion. I am inclined to think this view pro-ceeds upon some confusion between what is ‘ contentious ' and the, eiact point of ti-me when Us pendens is constituted. I should inferthat the conclusion was arrived at by analogy to the English cases,wh&h decided that, as between plaintiff and defendant, the serviceot4fehe subpoena constitutes the lis pendens between them (seeB$$amy v. Sabine 3 We are, however, relieved from going intothd* question as to the precise point of time when a lis pendensis constituted in this country, whether as between plaintiff anddefendants or as between co-defendants, for the section says:
‘ During the active prosecution of a contentious suit,’ &c.,
which indicates with reasonable dearness that, while the suit isbeitaig actively prosecuted, the property is not to be transferred ordea& with so as to affect the rights of any other party thereto’under any decree or order which may be made therein. It is not■ suggested that this suit was not being actively prosecuted whenthe1 transfer was executed. In this view I fail to see how the case6ited is any authority as to what is or what was not a contentioussuit. A contentious suit is a suit involving contention, and it is*perhaps difficult to predicate of any suit; at the moment of itsinception, whether or not it is likely to be contentious; but if inpoint of fact it turns out to be a suit which was contested, as is thecase*here, then, to my mind, the suit is a contentious one, and thesection applies. It seems to me that in order to appreciate whetherthe section applies we must regard the event, and in this case theevent showed a contested suit.” There does not appear to me to beanything in the decision of the Privy Council in Faiyaz Hussain v.
Miin'shi Prag Mamin4 that compels us to hold that under thelaw of Ceylon an action is a lis pendens on the mere filing of theplaint.i
.There are decisions under some of our local enactments whichdo not, however, afford us much, help in solving the problem that.arises in the present case. It was held, for instance, in AbramFernando v. Silvestre Per era,5 that, for the purposes of the
1889; J, L. B. 27 Cal. 77, at pp. 3 IS Cal. 64$.
83 and 84; and op. Kiishnappa v.3 (1875) 1 De G. and J. 566 , 578, 584t.
Shivappa, (1907) I. L. B. 31,4 (1907) 5 Cal. L. J. 564.
Bom. 893. at p 399.3 (1880) 3 8. C. C, 158.
( 464 )
1917.
WoodRbnton C.J
Mvheeth v.Nadaroja-pilla
Prescription Ordinance, No. 8 of 1834, section 8, an actiqn" commenced " either on the filing of the libel or on the issue of t]iesummons.1 Thereis also a decisionoftheFull Court to the
effect that, from the standpoint of section 17 of the PartitionOrdinance, 1863,® the filing of the libel is the institution of theproceedings.3 The“ commencement ”oftheaction, within the
meaning of the Prescription Ordinance, is not, however, necessarilycoincident with its acquisition of the character of lis pendens;and the language of section 17 of the Partition Ordinance, 1863,2‘' whenever any legal proceedings shall have been instituted forobtaining a partition or sale of any property,” offers a reasonableexplanation of the decision of the Full Court in Petera v. Perera.4,
There does notappear to me toheanyauthority that runs
counter to the decision of Middleton and ^Grenier JJ. in Perera v.Silva.5 The principle laid down in that case is in conformityboth with English and with Roman-Dutch law, and every consider-ation of convenience and fairness is in favour of its adoption as thelaw of Ceylon.
I agree with the obseryations of my brother De Sampayo as tothe applicability of the doctrine of lis pendens to mortgage actions.I would dismiss the appeal, with costs. I agree to the reservationof the plaintiff’s right in regard to the rent under the lease proposed
by my brother De Sampayo.
*
Shaw J.—
The question arising for decision is whether the filing of a plaintunder Chapter VII. of the Civil Procedure Code constitutes a lispendens that prevents the parties to the suit from transferringrights in the subject-matter of the suit, even although summons hasnot been effected on the defendant to the action, and he has noknowledge that the suit has been instituted.
The doctrine of lis pendens is common to both the English andRoman-Dutch law, the only difference being in the time when thelis pendens has been held to attach.
Under the English law, prior to the legislation necessitating theregistration of Us pendens, it was held to attach at the time ofthe service of summons on the defendant (Bellamy v. Sabine ®).Under the Roman-Dutch law it appears to have attached whenthe suit became contentious, which occurred in different kinds ofactions at different times. Under the Roman-Dutch law asadministered in South Africa it has been held to attach in all caseson the close of pleadings (4 Nathan 216). Under neither systemdoes it appear to have attached before notice of the action has beengiven to the defendant party.
1 Cp. Adiriana ©. Prolis Hatny, 3 Cf. Banda v. Coder, (1913) ef N. L. R. 79(1884) 6 S. C. C. .93, and Perera* (1890) 9 S. C. C. 105.n. Perera, (1890) 9 S. C. C. 105.* (1910) 13 N. L. R. 81.'
a No. 10 of 1868.* (t857) 1 De G. and J. 566.
( 465 )
I do not think I need discuss the rule adopted in India or thecases cited as to the law in that country, as the law there dependsupon the direct legislative enactment contained in the Transfer ofProperty Act of 1862.
In Pereira v. Silva 1 a lie pendens has been held to attach in Ceylonupon the service of the summons on the defendant, and this casehas been followed in the subsequent cases, D. C. Galle, No. 11,524,3and Meyappa Chetty v. Hadfiar.*
In view of the uncertainly in the date of attachment under theRoman-Dutch law, and the inconvenience of adopting the practiceestablished in South Africa in a country like Ceylon, where fraudu-lent transfers of property are so common, I think it convenient to.follow here the English rule as adopted in Per era v. Silva 1 and theother cases I have referred to.
In the present case there is no evidence that the defendant wasaware of the institution of the action, or was evading service, so Ineed not consider what effect such circumstances might have in acase where they are proved to exist.
In my opinion the decision of the District Judge is oorrect, and Iwould dismiss the appeal, with costs.
I agree to the reservation of the plain tiff's right in regard to therent" under the lease proposed by my brother De Sampayo.
1917.
Shaw J.
Muheeth v.Nadarajah-piUa
De Sampayo J.—
An undivided one-third share of the property in dispute belongedto Florence Casie Chatty, and she and her husband on November 8,1912, mortgaged it to one Jeevunjee Noorbhai. The mortgagee onOctober 14, 1913, put the bond in suit against the mortgagors inaction No. 37,308 of the District Court of Colombo, but summonson the defendants in that action was not served till June 11, 1914.In the meantime the mortgagors, by deed dated October 25, 1913,leased the one-third share to the defendant in this action for a term offour years from March 1, 1915. The mortgagee, however, proceededwith the action as it was brought, and having obtained a decree, hehad the mortgaged property sold on December 3, 1914. The plaintiffin this action became purchaser, and obtained a Fiscal’s transfer onJuly 10, 1915. He sued the defendant in ejectment, and has appealedfrom the judgment of the District Judge dismissing the action.
The appeal is supported on the ground that, although the defend-ant was not a party to the mortgage action, he is bound by thedecree, inasmuch as he took the lease pending the mortgage action,while the defendant contends that as no summons had been servedin that action on his lessors before the date of the lease the actionwas not pending so as to prejudice him. I think the defendant’scontention should prevail in view of the law relating to lie pendens.It is not necessary for me to refer to all the authorities cited at the1 (1910) 13 N. L. B. 81.* S. C. Min., Oct. 90, 1913.» 3 C. W. R. 159.
1917.
Db SamyayoJ.
Muheeift v.Nadaraja-piEZa ^
( 466 )
argument; I need only say that I agree with the decision in Perera-v. Silva,1 in which, upon a consideration of the principal authorities,English, Indian and Roman-Dutch, it was held that Us pendentarose only upon the service of summons, so as to affect any dealingwith the subject of litigatipn by the party defendant.
I entertained some doubt as to whether the doctrine of Its pendensapplied where the action which was pending was a mere mortgageaction. In Bellamy v. Sabine,2 which is the leading case on the .subject, the principle was stated by Lord -Cranworth as follows:
“ The law does not allow litigant parties to give to others, pendingthe litigation, rights to the property in dispute so as to prejudicethe opposite party. Where a litigation is pending between ■ aplaintiff and a defendant as to the right to a particular estate, thenecessities of mankind require that jbhe decision of the Court in thesuit shall be binding, not only on the litigant parties, but also onthose who derive title under them, by, alienations made pending thesuit.” I could not quite see that in a mortgage action there wasany “property in dispute,” or that the litigation was as to the“ right to any particular estate,” as to which there would' be a<
decision of the Court in the suit,” and I thought that so long asthe mortgage action was duly constituted by all those having atits institution any interest in the mortgaged property being madeparties, the mortgagee and the purchaser under the decree would besecure. But on reconsideration I think that this is taking toonarrow a view of the nature of the mortgage action. Such actionis a real action, and involves a claim to bring to sale “ a particularestate.” The claim may be disputed by the denial of the exist-ence of the debt, and thus the right to the mortgage security willbe potentially “ in dispute,” and there will be a decision of the Courtthereon when it orders that the property shall or shall not be soldin realization of the mortgage. I, therefore, think that the rule of!Us pendens applies as much to a mortgage action as to any otheraction relating to immovable property. The result may be hard,for a mortgagee who may not be aware of any alienation by themortgagor after the date of the action, but the hardship is nogreater than if the alienation was before the date of the action and-the mortgagee failed to take advantage of the provisions of sections'643 and 644 of the Civil Procedure Code.
Mr. Bawa, for the plaintiff, urged that in the alternative theplaintiff was entitled to the rent payable under the lease. But nospecific claim for rent was made in this case, and there is nothing toprevent the plaintiff from bringing another action for rent if he is soadvised. But in order to remove any doubt6 on the point, libertyto bring any such action will be reserved to him.
I agree that the appeal should be dismissed, with costs.
Appeal dismissed.
2 (1857) 1 De G. and J. 578.
i (1910) 18 N. L. fl. 81.
( 467 )
WUESEKERA v. BANDA.
D. C. Kurunegala 6,969.itytate 10, 1917. ^ood Bbmtoh C.J.—
The plaintiff instituted this action ior declaration of title to, and for therecovery of the possession of, a land called Galabodahena, alleging that it waschend land, in the Kandyan Provinces, that it was therefore at the disposal ofAc Crown, and that it had been acquired on a Crown grant by RanasingheE&phamy, who, on May 16, 1916, sold it to the plaintiff himself. The defendantpleaded that the land belonged to Ukku Banda, Vidane, who died in 1895.The defendant is his posthumous son. His widow, Kiri Monika, took out lettersef—administrationto his estate. She subsequently married Ranasinghe
Ranhamy, who was appointed curator of the defendant's property. The landGalabodahena was inventoried in the testamentary case as belonging to thedeceased, and in the curatorship case aB the property of the minor. Thedefendant alleged that, when the land was advertised for settlement, Ranhamyappeared before the Settlement Officer and claimed the land, but that he hadfraudulently obtained a Crown grant for it in bis own name1. On February 9,191^ the defendant instituted case No. 5,476 of the District Court of Kurunegalaaga^ist Ranhamy for the recovery of the land in dispate and other lands.Solomons was served on Ranhamy in that action on March 12, 1915. * Thedefendant filed bis answer on the 12th, and his amended answer on May 26.On May 16 Ranhamy—executed his deed of transfer in favour of the plaintiff.It was argued on behalf of the defendant in the District Court that thisconveyance . was invalid, inasmuch as it had been executed during thependency of case No. 5,476, D. C. Kurunegala. The learned District Judgedid not in terms deal with' that question at all. It did not form the subject.of an express issue at the trial, although it was no doubt meant to be included'in the 12th issue—“ Is the plaintiff bound by the decree in D. C. KurunegalaNo.' 5,476? ”—and it was dealt with in the arguments in the District Court. Thelearned District Judge held that the land was at' the disposal of the Crown;£hat there was nothing to show that Ranhamy had bought it with moneybelonging to his ward or in his fiduciary capacity as curator; that the purchasehad been effected for valuable consideration; that the plaintiff knew nothingof any litigation between the defendant and Ranhamy; that he, too, had paidfull consideration for the transfer; and that his title under that transfer shouldbe upheld. He accordingly gave judgment in the plaintiff's favour, withdamages and costs.
. The defendant appeals.
Ifhe land in suit was bought from the Crown by Ranhamy in his own namealong with other lands, which he purchased in the name of the defendant.The record of the proceedings in D. C. Kurunegala No. 5,476 shows that onOctober 21, 1915, Ranhamy appeared in. Court and admitted that he had nolonger any interest in the land Galabodahena, as he had sold it to a third party.Tfie. defendant, who, as I have already mentioned, was plaintiff in that action,was presentat thetime.A proctor appeared for him.Thejournal entry
concludes asfollows:“ Byconsent of parties judgmentfor the plaintiff as
prayed for. No damages and no costs.'' It results from the decision of theFull Court in 41—D. C. Colombo, No. 45,446 (1917, 19 N. L. R. 461),that, as thesummons .hadbeen served on Ranhamy inD.C. Kurunegala
Nff. *5,476 prior to the sale by him of the lot in question to the plaintiff,■'’thatsale was effected pendente lite, and was, therefore, invalid. It was contendedbjf counsel for the plaintiff (i.)' that as the judgment in – D. C. KurunegalaNcf, 5,476 was a judgment by consent, the doctrine of tis pendens did not apply;_aad-—(ii.) that, in any event, that consent judgment was the result .of collusionbetween theplaintiffand the defendant. The former ofthesecontentions is
disposed of by numerous decisions, in which it has been held that a judgmentDy’ consent involves the exercise of a judicial and not a ministerial functionby the Court, and is quite as conclusive between the parties as if it had been.
1917.
( 468 )
1917.
, WoodRenton C.J.
Wijesekera v.Banda
pronounced by the Court after the action had been fought out. (See In re-South America and Mexican Co., 1896, 1 Ch. 87; Annamatar Chettiar v. Mala-yandi Appaya Nath, 1906, 1906, I. L. Jt. 29 Mad. 426; London «. MorrisT1882, 5 Sim. 247.) Aa regards the latter there was no issue on the subject;there was nothing in the pleadings to indicate that the action was collusivein its inception, and while the proper course for the plaintiff in D. C, Kuru-negala No. 6,476 to have adopted might well have been to have invitedeither the Court to make Banhamy’s vendee a party to the proceedings, orto exolude the land here in dispute from the purview of the action, I amunable to find in the evidence any reliable proof of collusion or fraud. I wouldset aside the decree of the District Court, and direct a decree to be enteredup dismissing the plaintiff's action, with the costs of the action and appeal.
If the law of lis pendens as it exists in Ceylon works hardship to bone fidepurchasers, the remedy is for the Legislature to amend it on the lineB of theEnglish Judgments Act, 1839 (2 and 8 Viet., c. 11, s. 7), by requiring – eitherexpress notice or registration.
Da Saupayo J.—I agree.