073-NLR-NLR-V-58-R.-G.-DE-SILVA-Appellant-and-M.-V.-ZOYSA-et-al.-Respondents.pdf
1956 Present: Weerasooriya, J., and H. N. G- Fernando, J.R. G. DE SILVA, Appellant, and 31. V. ZOYSA el al., RespondentsS. C. US—D. C. Balapiliya-, 423
Sale of immovable properly—Conveyance coupled with clause for reconveyance—Oralevidence of mortgage—Admissibility—Tender of money—Quantum of evidence.
In a transfer of immovable property, what purports to bo a conveyancecoupled with a clause for rcconveyoncc on payment of a certain sum of moneywithin a stipulated period cannot bo proved by oral evidence to have been inreality a mortgage.
Quantum of evidence necessary to prove tender of money before the duo dateconsidered.
-AlPPEAI, from a judgment of the District Court, Balapitiya.
Sir Laiita Rajajjakse, Q.C., with Bertram J. de Zylva, for the 2nddefendant-appellant.
S. C. E. Rodrigo, for the plaintiff-respondent.
Cur. adv. vult.
March 2S, 1956. H. 3T. G. Ferxaxdo, J.—
The plaintiff in tliis action has been granted a. decree declaring thattwo deeds executed by liim are in the nature of mortgage bonds and thathe is entitled to o lit a in a discharge of the bonds on payment of specifiedsums of money.
By a notarial document dated 11th October, 1949, described on itsface as a Bill of Sale, the plaintiff sold and conveyed certain immovableproperty to the 1st defendant for a sum of Rs. 750, “ reserving the rightto have a reconveyance within two years on payment of the said principaland interest”. By a second notarial document of 1st July, 1950, des-cribed as a transfer, the plaintiff sold and conveyed to the 1st defendantfor a sum of Rs. 470 “ the right to re-purchase ” the same property, whichright had been reserved to the plaintiff by the earlier deed, while againreserving the right to re-purchase the right now sold on any date ' withinone j'ear, three months and eleven days ” of 1st July, 1950. It will beseen that, while the reservation in the first deed was a right to a recon-veyance if a sum of Rs. 750 together with interest was paid before 11thOctober, 1951, the effect of the second deed was that the light to a re-conveyance would be lost unless the plaintiff in addition re-paid withinthe same stipulated period a further sum of Rs. 470 with interest. Inso far as the 1st defendant was concerned, the second payment which hemade had the consequence of increasing the amount which the plaintiffwould have had to pay for the reconveyance and thus of diminishing thechance of the exercise of the right to claim the reconveyance.
It was admitted that the plaintiff p as entitled to remain in possessionof the land in terms of the first deed and did in fact continue in possession.It is also in evidence that the plaintiff borrowed two sums of Us. 250 andUs. 120 from the 1st defendant in December, 1919. These loans representthe amount of consideration for the second deed of July, 1950, and it maybe assumed that the necessity for the second deed arose because theplaintiff was unable to repay those loans.. These circumstances doindicate that the plaintiff in all probability regarded his transactionswith the 1st defendant as being loans upon the security of land and hopedfor an improvement of financial circumstances to release him from hisliabilities. But the difficulty in which the plaintiff' finds himself is thatthe legal form of the transactions was that of a sale coupled with a clausefor a reconvej'ance and not that of a mortgage.
In view of the recent judgments of the Privy Council and of this Court,it is now too late to take up the position which the plaintiff'has attemptedto take in this ease. Their Lordships of the Privy Council in Saverimuttuv. T'hcngavelauiham ct. al. 1 ajjproved the principle laid down in Pererav. Fernando 2 that “ where a person transferred a land to another by anotarial deed, purporting on the face of it to sell the land, it is not opento the transferor to prove bj' oral evidence that the transaction was inreality a mortgage and that the transferee agreed to reeonvey the propertyon payment of the money advanced ”. If what purports to be a salejjure and simple cannot be proved by oral evidence to have been in realitya mortgage, neither can a conveyance coupled with a clause for recon-veyance on fulfilment- of a stipulated condition he shown to have been amortgage. This latter proposition was clearly recognised by this Court-in the recent case of Sell lira v. Ukku 3 after an examination of all therelevant authorities. The finding of the learned District Judge that thetransactions which are the subject of this action constituted a mortgagecannot therefore be sustained.
Counsel for the appellant has argued that the deeds relied on by theplaintiff do not even establish a valid agreement to reeonvey the property,for the reason that they are signed only by the transferor, and that thereis no notarially attested writing binding the transferee to reeonvey. It isnot, however, necessary to decide whether this argument should succeedsince the plaintiff’s action must fail even upon the assumption that therewas a valid agreement to reeonvey.
The learned District Judge, having held on the law that the trans-action between the plaintiff and the 1st defendant was in reality a mort-gage, went- on to find upon an issue of fact that the plaintiff did tenderto the 1st defendant on or about 3rd August-, 1951, the two amountswhich he had to repay as a condition precedent to the reconveyance ofthe property. But this finding is quite unsupported by the evidence.Tiie plaintiff’stated in chief that lie tendered the money to the 1st defen-dant at- the latter’s boutique at- Itatmnlana once on 3rd August, 19-31,and again two days later; on each occasion he was informed that the1st defendant would come to the plaintiff’s village (in the Southern Pro-vince) to receive the money ; but the 1st defendant failed to go to the
i {70-51) 55 -Y. X. 11. 520.5 (1011) 17 X. L. R, ISO.
3 (105-5) 56 X. L. Jl. 3-37.‘'
village ns promised. The plaint iff also stated that he then informed theDebt Conciliation Board about the transaction. In cross-examinationthe time of the tender was changed to the first week in September, andthere was the additional allegation that the Debt Conciliation Board askedthe 1st defendant to accept the money. This last allegation would havebeen decisive if it was supported either by the evidence of an officer of theBoard or even by the production of a copy of the plaintiff's applicationto the Board. But no such evidence was available at the trial. Havingregard to the purposes for which the assistance of the Board is usuallysought, the probabilities-arc all in favour of the 1st defendant’s versionthat the plaintiff made his application to the Board only in an endeavourto secure an arrangement for payment by instalments and not in orderto tender immediate payment.
As to the alleged tender at Katmalana, there was not only the contra-diction as to the date of the tender. The plaintiff ajjparently allowedthe sands to run out without writing any letter to the 1st defendant on thesubject of the repayment and without consulting his lawyers as to theaction he should take in order to secure the. reconveyance. Even whenhe came into Court, he did not, as is usual in such cases, bring in themoneys payable for the reconveyance. 3Eoreo ver his cause of action wasnot upon the footing of a conditional transfer and a tender in fulfilment,of the condition, which would have been the obvious course if there hadin fact been a tender in due time. The allegation of tender was quiteirrelevant to the plea that the transactions were in reality a mortgage.The choice of this plea is to my mind a strong indication that the plain-tiff’s advisers had themselves little confidence in his ability to prove thetender. Tire plaintiff has In my opinion failed to discharge the burdenof jjroving the tender, and the relevant issue should have been answeredin favour of the defendants.■
For these reasons I would set aside the decree entered in favour of theplaintiff and dismiss his action with costs in both Courts.
Appeal allowed.
Weerasooriva, -J.—I agree.