3 (ISIS) 2 Exch. G54.
■* (1010) 14 y. L. It. 152.
■asserted title and not morely encumbrances against purchasers at Fiscal’ssales. But even where a claim of title was subsequently sot up tho merefact that bids wore mado was not thought conclusive in Thcadoris deSilva v. Kalu Appn (supra). There, upon the facts it was held that thobids were made morely in order to buy up tho land and avoid future liti-gation and that the ultimate purchaser at tho Fiscal’s sale was not.provedto havo been induced to purchase by reason of the bids made by thoperson who subsequently set up title.
'More directly in point is the case of Tikiri v. Belinda where the plain-tifF was present at an execution sale hold under his own writ of a 4/Gthshare of the land and himself made bids. Upon these facts he was heldto be estopped from setting np a prior registered usufructuary mortgageof the entire land in his favour. A special feature of that case referredto by do Sampayo J. was that the plaintiff was himself a writ holderand was present at the sale in that capacity and as a bidder ”, and itwas held (apparently for the reason that he was a writ holder) that aduty lay on him to speak and to disclose the mortgage. On those groundsde Sampayo J. distinguished the ease from that of Gar up pen Chctly v.IVijesinghe (supra) which he had. earlier decided himself. In the decisionlast mentioned the same learned Judge observed that “ in the case of amortgagee or lessee the duty to notif3’ his right is less apparent seeingthat notwithstanding the mortgage or lease the land may still be sold ”.While therefore a person who himself has title may well have a duty eitherto warn or else not to mislead others to whom the land is being offeredfor sale, such a duty does not so clearly arise in the case of a person theexistence of whose interests would not prevent the passage of title toanother. In the present case the land was put up for sale under a par-tition decree and all the parties must be presumed to have been awareof the provisions of section. 12 of the Partition Ordinance which expresslypreserves the rights of a mortgagee of land which is the subject of thepartition or sale. In view of the provisions of that section and of the factthat acquisition by mortgagees of lands subject to their own mortgagesis not unusual (merger being a recognised legal form of the extinction ofmortgages), it cannot in my opinion be said that the conduct of the plain-tiff in bidding at the sale amounted to an unequivocal representation thatthere was no existing mortgage. If, as I think, the act of bidding does notwork an estoppel, still less can the failure of the plaintiff to disclose hismortgage prevent him from now asserting his interest. But it wouldperhaps bo useful to add a few observations on this matter as well.
Silence or inaction can only count as a representation if there is alegal duty (not merely moral or social) owed to a party to make thedisclosure, the omission of which is relied on to create the estoppel,(Spencer Bower p. 65 sec. 75). Baron Parke in Freeman v. Cooke (supra)observed that the omission to disclose will .only estop a person if “ thereis a duty cast on him by custom of trade or otherwise, to disclose thetruth ”. Many of the cases show that the rule of estoppel by silence oracquiescence is usually applicable when there is some dealing or trans-
action between the parties or where “a person stands by” and permitsanother to incur expenditure the benefit of which he subsequently seeksto keep for himself. Apart from such cases a person who has a title,right or claim, has a duty to disclose it to another who conducts himselfwith reference to the property in a manner inconsistent with that.title,right or claim. But where a land which is already subject to a mortgageis being sold to some third party, the acquisition of title by the third partyis not inconsistent with the interests of the mortgagee and thereforedoes not involve any such violation of the mortgagee’s rights as wouldrender any disclosure necessary..
For these reasons the provisions of section 115 of the Evidence Ordi-jianco are not in my opinion applicable in the circumstances of this case.'The ordinary principle that the plaintiff’s prior registered mortgage pre-vails over the subsequent Fiscal’s conveyance must therefore be applied.
To turn now to the plaintiff’s claim for a hypothecary decree in res-pect of the second, land. According to the pleadings the 1st defendantwho was the original mortgagee sold the second land to the 4th defendant.But it was also stated in the plaint that according to the Interlocutorydecree entered in Case No. 26520 D.C. Kalutara, the interests of the 1stdefendant in the second land are now described in the manner set out inthe second schedule to the plaint. The learned Judge found however thatthe description in the plaint of the second land was confusing ; and ahypothecary decree over the second land was denied to the plain tiff by theJudge on the ground tha-t there was no evidence before him of the con-version of the second land described in the mortgage bond into the landas described in the Interlocutory decree in Case No. 2C520. But it is byno means clear that any of tho defendants contested the right of the plain-tiff to the hypothecary decree. The 1st and 2nd defendants filed noanswer and were not represented at the trial. The 4th defendant also filedno answer but he was represented, and the proceedings of 9th November,1954, would seem to indicate that the mortgage was admitted by theparties who were represented at the trial and that tho only issue actuallyraised was the one with which I have already dealt.
The question whether the second land was correctly described in thoplaint or not, appears to have been raised for the first time by the learnedDistrict Judge in his judgment. ’ In these circumstances I think the dis-missal of the.plaintiff’s action in respect of the second land without hisbeing given any opportunity either to identify the land in respect ofwhich he claimed a decree or to lead evidence in support of his claim wasquite unjustified.
In the result the plaintiff’s appeal must succeed in regard to both lands.Hypothecary, decree' must be entered ifi his favour in respect of the landdescribed in schedule No. 1 in the amended schedule.to the plaint .which;is attached to the amended^ plaint marked “ C ”. . As to the secohcl land :'which is'described in schedule No 2 in the amended schedule to the plaint,the case is remitted to the District Court %Wth a direction that th'^plaintiffbe given'an opportunity to identify the land so described with the land
No. 2 described in the schedule to the mortgage bond PI, including*an opportunity to lead any further evidence considered necessary. Ifhe so identifies the land to the satisfaction of the District Judge, ahypothecary decree should be entered in theplamtiff’sfavourinrespectofthe second land as well. That part of the decree of the District Courtwhich dismisses the plaintiff’s action against the 3rd and 4th defendantsis set aside. The 3rd defendant will pay to the plaintiff the costs of theproceedings in the District Corirt and of this appeal.
T. S. Fehxasdo, J.—I agree.
Judgment set aside.