Present: Fisher C.J. and Drieberg J.
RANASINGHE v. CAROLIS el al.
212—D. C. Kurunegala, 11,943.
Lis pendens—Mortgage action not registered—Sale by mortgagor's heirpending action—Transfer by heir registered in wrong folio—Conflict of title.
The plaintiff was the purchaser of property at a Fiscal’s sale heldin pursuance of a decree entered in his favour in a mortgage action,which was not registered as a lis pendens. He registered his Fiscal’sconveyance in the right folio.
The added defendant who purchased the property from an heirof the mortgagor during the pendency of the action registered hisconveyance in the wrong folio.
Held, that the plaintiff’s title ought to prevail.
LAINTIFF instituted the present action for declaration of title
to a land, which was owned by one Mudianse, who mortgagedit to him by a deed dated March 6,1915, and registered on May 15,-1915. On November 23, 1915,_Mudianse obtained a Crown grant
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for the land which he registeredin a different folio. Mudianse diedand the plaintiff instituted an action on the land against his legalrepresentative and obtained a decree on February 12,1925. Neitherthe lis pendens nor the decree was registered. The land was sold inpursuance of the decree and purchased by the plaintiff, who obtaineda Fiscal’s transfer on August 4, 1926, which he registered on August28, 1926. Prior to this date the mortgaged premises had been soldby the heir of Mudianse to the added defendant, who had leased it tothe defendants. The transfer in favour of the added defendant wasregistered in the wrong folio. The learned District Judge held thatas the plaintiff had failed to register his lis pendens or decree theadded defendant was not bound by the proceedings and dismissed,the plaintiff’s action.
H. V. Perera (with him Amarasehara), for plaintiff, appellant.—The non-registration of the lis pendens or the mortgage decree isimmaterial. The added defendant’s deed is registered in the wrongfolio. It must, therefore, be treated as an unregistered deed. Thecompetition is then between a prior registered Fiscal’s conveyanceat a sale in execution against a judgment-debtor and an unregisteredvoluntary conveyance from him. The question is merely one of theapplication of sections 16 and 17 of Ordinance No. 14 of 1891. Theprior registered deed prevails. The added defendant could haveprotected himself by due registration. He has not done so. Hadthe appellant registered his lis pendens and his decree he wouldmerely have had additional rights and been able to rely on hismortgage bond and the rights flowing from the mortgage action. Inthe present case he cannot do so, but he can still treat his mortgagedecree as a simple money decree and avail himself of the provisionsof sections 16 and 17 of the Land Registration Ordinance by reason ofthe prior registration of the Fiscal’s conveyance issued in pursuanceof the sale in execution.
N. E. Weerasooria, for defendant, respondent.—The rights of theappellant are derived from the contract upon the mortgage bond.The mortgagee is himself the purchaser and the appellant. Hisposition is different from that of a stranger purchaser (Aldin Khanv. Ali Khan1). In a mortgage action the lis pendens must be regis-tered (section 27a of Ordinance No. 14 of 1891). A mortgage actiosis pending until the delivery of possession to the purchaser for thepurpose of section 27a. (See Saravanamuttu v. Sellamvitu2 andSilva v. Fernando.3) The provisions of sections 16 and 17 of OrdinanceNo. 14 of 1891 must be read in the light of, and not independentlyof, the provisions of this section, which is a section of the same Ordi-nance hot inconsistent with the former, and, being a later section,
1 10 All. 166.* (1924) 26 N. L. R. 385.
3 (1920) 22 N. L. R. 39.
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may be said to control the former. The mortgagee must combinein one action all his remedies (Punch* Kim v. Sangu1 and Suppra-maniam Chetty v. Weerasekara2). In order to get a binding decreehe must register his lia pendens and his decree (Saravanamvttu v. Sella-muttu (supra) and Anohamy v. Haniffa 8). There was no encumbranceon the register when the added defendant obtained his conveyanceand no necessity for him to register his deed as far as the mortgageaction was concerned. The appellant having failed to observe astatutory provision and permitted the added defendant to obtain adeed unaffected by his action could not, being in default by a later act,defeat rights already acquired. A mortgage purchaser’s rights aredifferent to those of a purchaser on a money decree (VdupiUaiv.Muthupillai et al* and Anohamy v. Haniffa6). The former cannotclaim any rights in regard to the land as divorced from thecontract on the bond and the Us pendens and decree arising fromthe action thereon. Having failed to observe the provisions ofthe Land Registration Ordinance in regard to lis pendens and thedecree, he cannot avail himself of other sections in the same statuteto cure his default unless there is special provision to that effect.
H. V. Perera, in reply.
December 3,1928. Fisher C.J.—
In this case Mudianse was the owner of certain lands which hemortgaged to the plaintiff by a document dated March 6, 1915.That document was registered on May 15,1915. On November 23,1915, Mudianse obtained a Crown grant for the same lands which heregistered in another folio. Mudianse died, and the plaintiff havinghad one Ukku Banda appointed his legal representative institutedan action on the bond against him on August 18,1924. The plaintiffobtained judgment in that action and decree was entered on Febru-ary 12,1925. Neither the lis pendens nor the decree were registeredby the plaintiff-appellant. In due course the mortgaged lands weresold in pursuance of the decree and purchased by the plaintiff-appellant who obtained a Fiscal’s transfer dated August 4, 1926,which he duly registered, in a folio which was a continuation of thefolio in which the mortgage bond had been registered, on August 28,
Prior to this date, namely, on February 3, 1925, the mort-gaged premises had been sold by the heir of Mudianse to the addeddefendant, by whom they were leased to the defendants. Thedeed transferring the property to the added defendant was regis-tered in the wrong folio, and this appeal was argued on the footingthat there was no registration of the transfer to the added defendant.
1 (1900) 4 N. L. R. 42.1 (1923) 25 N. L. R. 289.
* (1918) 20 N. L. R. 170.4 (1923) 25 N. L. R. 261, at p. 267.
6 (1923) 25 N. L. R. 289, atp. 295.
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In December, 1926, the plaintiff brought an action for declarationof title to the land in question and asked that the defendantsbe ejected therefrom and that he should be placed in quiet possession.The learned Judge was of opinion that inasmuch as the plaintiffhad not registered his Us pendens or decree the defendant wasnot bound by proceedings founded on the mortgage bond andthat the Fiscal’s transfer did not prevail over the added defendant’sdeed of February 3, 1925. He dismissed the plaintiff’s actionand declared the defendants entitled to the land, but orderedthe defendants and added defendants to pay the plaintiff theamount due on the mortgage bond with interest.
This case is not a case of competition between registered docu-ments. The sole question is whether the failure by the plaintiffto register his action on the mortgage bond as a l>s pendens vitiatesthe Fiscal’s transfer which was the outcome of the proceedingsin that action. The learned Judge seems to have inclined to theview that the case would have been different had the purchaserat the Fiscal’s sale been a stranger. In my opinion the learnedJudge has attached too much weight to the failure of the plaintiffto register his Us pendens. I do not think the registration of alis pendens, so far as it affects a case such as the present case, canhave a further effect than this, namely, that a purchaser whobuys during the pendency of an action which has not been regis-tered as a Us pendens is not affected by proceedings in the suitin so far as they are previous to the transfer to him, but I foil tosee on what principle it can be said that he is not then subjectto the obligation to look after his own interests in the matter ofregistration. Had the added defendant duly registered his transferhe would have been in a perfectly safe position. It is clear thatif the mortgagor or his representative had transferred the propertyon his own initiative subsequent to the transfer to the addeddefendant, or if the transfer had been in pursuance of a sale bythe Fiscal in execution of an ordinary decree .for payment of money,and the transferee had caused the transfer to be duly registeredin the right register, that the transfer, apart from any questionof notice, would prevail over that of the added defendant. Mr.Weerasooriya even admitted that if the transfer to the addeddefendant had been after the date of the Fiscal’s transfer thelatter must prevail. I cannot see any reason why a transferee. who fails to protect himself by registering his transfer should bein any better position as against a Fiscal’s transfer which is theresult of proceedings in a mortgage action which lias not beenregistered as a lis pendens, even though the purchaser is theplaintiff in the action, than lie would be in the case of a registeredtransfer which was unconnected with any action. Nor do I seewhy a person in the position of the plaintiff who lias failed to
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protect himself by registering his lia pendens has thereforerun some risk during the pendency of the action should not getthe benefit of registration when at length he decides to so safeguardhimself. To discriminate between a transfer on a Fiscal’s sale,under circumstances such as obtained in thejpresent case, and atransfer unconnected with a mortgage suit seems to me to be purelyartificial. The plaintiff got good title by legal process and regis-tered his transfer, and in the competition between him and an •unregistered transfer I think he should prevail.
In my opinion the decree of the District Court should be setaside and judgment should be entered for the plaintiff as claimed,for declaration of title and for an order ejecting the defendantsand placing him in quiet possession. No evidence was calledas to damage, but the plaintiff is entitled to an order for costsagainst the defendants in the District Court and ot this appeal.
This is an action rei vindicatio. The owner, Mudianse, mortgagedthe premises to the appellant by a bond P 5, of March 6, 1915,which was registered on May 15, 1915, in folio 24/65. This is thefolio in which the first deed relating to this land was registered andit is therefore the right folio in which, or in the continuations ofwhich, all subsequent dealings with the land would have to beregistered if they are to be regarded as duly registered for the pur-pose of the Registration Ordinance. The appellant registered hisaddress as well under the provisions of the Civil Procedure Code.
The appellant instituted action on this bond on August 18, 1924,obtained decree on February 12, 1925, and the land was sold by theFiscal. He bought it himself and obtained Fiscal’s transfer ofAugust 4, 1926, which was duly registered on August 28, 1926, infolio 187/130 which is an extension of folio 24/65. .
The appellant did not register the institution of his action or thedecree.
Mudianse on November 23, 1915, obtained a grant from theCrown for this land and it was registered in a new folio, F 162/221,not connected with folio 24/65. Bandara Ettana who succeededto Mudianse’s estate by inheritance sold the land to the addeddefendant-respondent by deed D 1 of February 3, 1925, whichwas registered on February 5, 1925, in folio 162/221. The'defendants are lessors under the added defendant.
The learned District Judge held that the defendants-respondentshad superior title, but he ordered that the appellant should recoverfrom the defendants-respondents the amount due on his mortgagebond and interest. The appeal is from this judgment.
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So far as the rights of these parties are to be decided on a com*parison of the conveyances to them alone, title is in the appellant,for the transfer to him of Mudianse’s interest is duly registered andthat of the added defendapt-respondant is not, but it is contendedthat the transfer to the added defendant-respondent, which wasafter the institution of the mortgage action and before the decreewas unaffected by the institution of the mortgage action and thetitle derived udder it as there was no registration of it as a lispendens.
This proceeds upon a misapprehension of the effect of the registra-tion of a lit pendens, when a person has bpught in exfeoution of adecree in an action, the institution of which was registered, andfinds himself in conflict with a transfer by the defendant during thependency of the action, but which has priority over his conveyanceby due registration, he can claim preference for his title on theground that the purchaser from the defendant was bound by theregistration of his lis and that no transfer could therefore be madeby the defendant to the prejudice of the person deriving title tinderthe execution of the decree in the action.
But if he finds himself opposed by a transfer from the defendantwhich in itself has priority over his conveyance, either by itbeing registered later or not registered at all, he can rely on thepriority of his conveyance alone and this would be quite unaffectedby the question whether the lis was registered or not.
This is the position of the appellant, to whose registered Fiscal’sconveyance is opposed the deed of the added defendant-respondentwhich is not duly registered and is therefore void as against theappellant’s conveyance.
The appeal is entitled to succeed.
The judgment of'the District Court is therefore set aside andjudgment will be entered for the appellant as claimed, but not fordamages. An issue as to damages was framed but there was noevidence on tbc point.
The respondents will pay to the appellant the costs of this appeal.
Appeal allon ed.