109-NLR-NLR-V-57-R.-A.-PERERA-et-al-Appellants-and-BEATRICE-PERERA-Respondent.pdf
1956Present: Gratiaen, J., and Gunasekara, J.
R.A, PERERA et al., AppsIIants, and BEATRICE PERERA.,Respondent
S.C. 90-100—D. C. Colombo, 6,30GL.
Exceptio rci vend it oe et (caclitac—Seizure of immovable properly and registration■■oj notice oj it—Sale by judgment-debtor pending (he seizure—Subsequent purchaseby his nominee from execution purchaser—Validity and effect of such purchase—Civil Procedure Code, ss. 237 (}}, 2-3S.
Where, during the pendency of a duly registered seizuro of immovablc-property, the judgment-debtor sells the property by private alienation priorto tho Fiscal's sale, the vendee is entitled to the benefit of tho exceplio rci■venditae et traditae if the judgment-debtor or his nominee buys tho propertysubsequently from the person who purchases it at the Fiscal’s sale. Althoughsection 23S of the Civil Procedure Code declares inter alia that any sale during. the pendency of the registration of a notice of seizure shall be void ” asagainst an execution purchaser and as against “ al! persons” deriving titleunder or through him, and although the words “ all persons ”, being wordsof tho utmost generality, are ex facie wide enough to include the judgment-debtor himself, it does not necessarily follow that the superior title acquiredby flio judgment-debtor by virtue of section. 23S can he vindicated in violation,of his subsisting personal obligations independently undertaken by contractor imposed on him under the general law.
J^LPPEAL from a judgment of the District Court, Colombo.
Sir Lolita Pajapak.se, Q.C., with T. P. Dissanayuke and E. S. Amcra-singhe, for the defendants (appellants in S. C. 100 and respondents iti- S: C. 00).‘
II. IF. Jayctcardcne. Q.C., with V. Arttlambalam and B. Scnaralna, forthe plaintiff (respondent in S. C. 100 and appellant in S. C. 99).
Cur. adv. vi/ll.
^February 10, 1956. Gratia ex, J.— –
This is a rei vituiicalio action. The plaintiff’s husband, Julius Perera,owned the property until 17th April 1950. He was in serious financial■difficulties towards the end of 1919, and a hypothecary decree for the saleof the property had been entered against him in action 2447 M. B. of theDistrict Court of Colombo. In addition, it was under seizure in executionproceedings in certain other cases. One such decree (to which I shalllater refer) whs entered in D. C. Colombo 9041/S in favour of S. 3f- D.Deen for Rs. 1,000 and interest payable on a promissory note.
In April 1950, Julius’ uncle, Don Lewis Perera Appuhamy (hereafterreferred to as “ Lewis ”), reluctantly agreed to assist him to settle his•debts so as to prevent the property, which was then worth about Rs. 30,000,from being sold in execution. He received from Julius a document (DS)indicating that Rs. 16,000 was required to meet his liabilities. Anagreement'was arrived at, and was implemented on 17th April 1950,whereby Julius sold the property to Lewis for this amount subject to thevendor’s right to re-purchase it for a like amount within 5 years. The 'conveyance P9 contains the following warranties and assurances :
<; And I the said vendor for myself and my' heirs, executors,administrators and assigns do hereby covenant, promise and declarewith and to the said vendor, his heirs, executors, administrators andassigns that the said premises hereby' sold and conveyed are free fromany encumbrance whatsoever and that I have not at any' time hereto-fore made done or committed or been party' or privy to any act, deed,.matter or thing whatsoever whereby or by' reason the said premises orany part thereof are, is, can, shall or may be imjieached or encumberedin title, charge, estate or otherwise howsoever and that I and my afore-written shall and will at all times hereafter warrant and defend the sameor any' part thereof unto him and his afore-written against any person-or persons whomsoever and further also shall and will at all timeshereafter at the request of the said vendee or his afore-written do andexecute or cause to be done and executed all such further and otheracts, deeds, matters, assurances and things whatsoever for the furtherand more perfectly assuring the said premises hereby sold and convey'edand every part thereof, unto him or his afore-written as by him or hisafore-written may be reasonably' required. ”■
The agreed consideration was paid by a series of cheques made in favour-of the judgment-creditors whose names were disclosed by Julius for the- -purpose. At the same time Lewis wasplaced in possession of the propertyas owner, the plaintiff himself acting as his rent-collector in respect of thetenements occupied by Julius’ former tenants who' attorned to Lewis.Lewis died on 10th September 1950 and his interests in the property'-passed to his daughter who is the 2nd defendant. The plaintiff and■ Julius at that time acknowledged the 2nd defendant as the new owner.
(perhaps through inadvertence) omitted to mention that the property' was.still under seizure for the recovery of the undisclosed judgment-debt inD. C. Colombo 9041/'S and that a notice had been served on him undersection 237 (1) of the Civil Procedure Code prohibiting him fromtransferring or charging the property in any way. Notice of this seizurehad been duly registered on I4th October 1949 and re-registered undersection 9 of the Registration of Documents Ordinance on 5th April 1950.Lewis was unaware of the seizure when he purchased the property underD9 or at any time thereafter. He assumed, without further investi-gation, that Julius was no longer in debt.
Registration of the seizure was kept alive by the judgment-creditor'sproctor Rasanathan (certain aspects of whose conduct as a member ofthe legal profession need not be discussed for the purposes of this appeal)and the property was centual!y purchased at a Fiscal's sale on GthFebruary 1951 for Rs. 2.50 by a man called Thiagarajah (Rnsanatban’snominee). The conveyance in favour of Thiagarajah was executed on2Sth May 1951, and a few days later Thiagarajah conveyed it for a con-sideration of Rs. 3,000 (borrowed under a contemporaneous mortgage) tothe plaintiff. She then instituted this action against the 2nd defendantclaiming a decree for tiie ejectment of the 2nd defendant from the propertyon the ground that- she (the plaintiff) had accjuircd a superior tide byright of purchase from Thiagarajah.
The action was instituted on the basis that flic plaintiff had becomethe owner of the propert}- in her own right, but the learned District Judgetook the view that she was merely Julius’ nominee. He ruled, however,that the title accpiired under the conveyance PI prevailed over that ofthe. 2nd defendant by virtue- of section 23S of the Civil Procedure Codewhich made the earlier sale to Lewis pending the registration of the noticeof seizure :: void as against the purchaser from the Fiscal selling under thewrit of execution and as against all persons deriving title under or throughthe purchaser ”. At the same time the 2nd defendant was declaredcut if led to compensation as a bona ft;lc improver (and to a jus relcnlionis)
. on the ground that Rs. 12,304-79 out of the consideration paid by Lev.ison the “ void ” sale had been utilised in freeing the property frommortgage.
. The plaintiff and the 2nd defendant have both appealed from thejudgment of the lower Court. The former complains that the order forcompensation and a jus releniionis is insupportable. The latter contendsthat the plaintiff is not entitled in the circumstances of this ease toa declaration of title or to a -writ of ejectment against her. If the 2nddefendant’s appeal succeeds, the correctness of the order for compens.il ion.need not be considered.’
The main argument addressed to us on behalf of the 2nd defendant was-that Julius luid from the inception planned to defraud Lewis, and that theexecution-purchaser Thiagarajah Mas also his nominee. I find myselfunable to hold that the learned Judge was wrong in rejecting thisargument on the evidence before him. It- is far more likely that ProctorRasanathan, having in the first instance procured the Fiscal’s conveyance–
iii the name of Thiagarajali for his own personal benefit, was laterattracted b}* the idea of selling it to Julius at a profit (although at a figuresubstantial^* less than its true value at the relevant date).
The 2nd defendant over-stated her defence on this part of the case..She was however entitled in law to resist a decree for ejectment withoutproof of any express fraud on the part of Julius as alleged in the courseof the argument before us. Having regard to the finding that theplaintiff was in truth a nominee of Julius, the obligations imposed on.Julius as a vendor under the conveyance HD dated 17th May 1950 pre-cluded him from claiming either directly or indirectly the benefit ofsection 238 for the purpose of securing the eviction of his formerpurchaser’s successor in title.
Section 23S declares inter alia that any sale during the pendency of theregistration of a notice of seizure shall be “ void ” as against anexecution purchaser and as against all persons deriving title under orthrough him. The intention is to “freeze” the judgment-debtor’stitle in the property under registered seizure so as to prevent him fromplacing it beyond the reach of a vigilant judgment-creditor. At the same 'time it protects a bona fide execution purchaser from the risk of theproperty having been alienated or encumbered during the interval betweenthe registration and the judicial sale.
The draftsman could hardly have had in contemplation the possibilitythat a judgment-debtor would purchase his own property at the Fiscal’s saleor even re-aequire title to it subsequently from the execution purchaser.Nevertheless, the words “ all persons ”, being words of the utmostgenerality, are c.v facie wide enough to include the judgment-debtorhimself. But it does not necessarily follow that the superior title acquiredby him by virtue of section 23S can be vindicated in violation of hissubsisting personal obligations independently undertaken by contract orimposed on him under the general law.
For the purposes of the present contest as to title, Julius himself mustbe regarded as the person claiming (through a nominee) to avoid his ownsale to Lewis tinder D9. The term “ void ” in section 238 must be readwith some limitation. In a very similar context section 240 of theIndian Code declared any private alienation of property while underattachment to be “ null and void ”. The Judicial Committee rejected theargument, that the words “ null and void ” were to be taken in the widestpossible sense as “ null and void against all the world, including even thevendor ”, Anund Lull Dass v. Shaw . In my opinion the subsequent-acquisition by Julius of superior title by virtue of section 238 did. nothave the additional effect of automatically destroying the rights andobligations of Lewis and Julius inter se under the earlier contract of sale.
Apart from the express undertakings and assurances contained in thecontract of sale, an obligation is imposed upon a vendor by the HomanDutch Law. “ not only to guarantee to his purchaser the peaceful possessionof the. thing sold, but also to give.an implied guarantee against every
form of molestation on the. part of the vendor himself and of third parties. ”Wessels on Contract Vol. 2, sections 4593, 4G03, and 4605. This is thefoundation of the. equitable doctrine exceptio rci vendilae et tradifae whichwas finally clarified by the Judicial Committee in Gunalillclce v. Fernando *.
The registration of the prohibitory notice served on Julius had, at thetime of the conveyance D9. merely reduced for the time being his powersof voluntary alienation, so that he had in truth only a defeasible titlewhich he could pass to Lewis on 17th April 1950. Nevertheless, theexceptio became available to the 2nd defendant (as the heir of Lewis) assoon as Julius (tlirough a nominee) re-acquired a title free from theearlier defect on Sth June, 1951..
“ On the confirmation of the right of an alienor which had beendefective at the time of the alienation, the original invalid title of hisalienee becomes confirmed from the very moment that the first vendoracquired ownership. ” Voet 23 : 1 : 1. The law will not peimit Julius toclaim the benefit of section 23S in a situation where the proposedeviction of his vendee’s successorin title would violate the obligation wliichthe law had imposed on him by virtue of the earlier contract. " One actsdishonestly who tries to evict a thing sold by himself and to stultifyhis owxr act : equity dictating that a jjlaintiff should be all the moreliable to be repelled by an equitable plea {exceptio) when he is himselfliable to be sued on account of the eviction. ” Voet 23 : 1 : 2. The scopeof the exceptio is not limited to cases where, at the time of the originalsale, the vendor had no title at all that he could convey. It applies withequal force if the title conveyed had been defeasible though not voidab initio at the relevant date.
Section 23S, construed in all its generality, certainly vested in Julius(as the real purchaser from Thiagarajah) a title superior to that which hehad transferred to Lewis in disobedience of the forgotten prohibitorynotice. Nevertheless, his obligations under ilie earlier contract of salewere not extinguished, so that the superior title which he later acquiredserved only to <" confirm ” the title of Lewis which had previously beendefeasible. The exceptio precludes Julius from relying on his new titlein order to evict his former purchaser 'whose continued possession he wasunder a special legal duty to protect. Mr. Berwick points out in afootnote to his translation of Voet 23 : 1 : 2 :— .
“ In point of equity, the last person to be allowed successfully torecover a thing which he has himself sold to his own defendant, is thevery person who would be liable in damages to the defendant for itseviction from the latter ; though law will allow him to sue, equity willallow the defendant, to take and succeed upon this plea, if he prefers notto Jose the thing rather than to have recourse to his right to damages. ”
The extent to which the exceptio can operate is indicated in {Vessels(supra) sections 4G00—4603. Let it be supposed that the vendee hadpurchased a title which was manifestly doubtful, and was in fact worth-less. Let it also be supposed that in these circumstances the vendor had
•expressly stipulated that he would not hold himself responsible for hisvendee’s eviction by the true owner. Even then, he could not, by•subsequently acquiring a better title, evict the vendee on his own account.
The learned Judge’s'decision (under issue 12) that the plaintiff is the•nominee of Julius suffices by itself to preclude her from obtaining a decree■for eviction which would not have been open to Julius himself. Theremedy cannot be granted to defeat the rights of the very person whose•possession Julius was bound to guarantee against " any form ofmolestation ” at his own hands. In this view of the matter, it is un-necessary to decide whether, and to what extent, the express assurances.and covenants contained in the conveyance PI afford additional grounds■■for rejecting the plaintiff’s claim. I would allow the appeal and dismiss'the plaintiff’s action with costs in both Courts.
*GtxxASEKAKA, J.—I agree.
Appeal in S. C. 100 allowed.Appeal in S. C. 00 dismissed.