021-NLR-NLR-V-17-SILVA-v.-SOYSA-et-al.pdf
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♦
[Pull Bench.]
Present : Pereira J., Ennis J., and De Sampayo A.J.
SILVA v. SOTS A et al.
146—D. C. Colombo, 32,015.
Partition—Land sold under Ordinance—Subject to existing leases.
Per Pebbiba J. and Ennis. J. (De Sampayo A.J. dissentiente).—The word " incumbrance" in section 8 of the Partition Ordi-nance (No. 10 of 1863) includes a lease, and so, where a land is soldunder the Ordinance, the sale is subject to existing leases, and alessee has no right to claim the proceeds.
T HE facts appear from the judgment.
Grenier, K.C. (with him Koch and Balasingham), for theappellant.—The appellant is entitled to claim a portion of theproceeds of sale. A lessee had no right to intervene in the case.
1918.
1018.
Silva v.Soysa
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Section 13 of the Partition Ordinance expressly conserves therights of lessees in the event of a sale. The lessee could not knowwhether the land wag to be partitioned or sold.
The lease is an incumbrance within the meaning of section 8 ofthe Ordinance. [Pereira J.—In any event your appeal cannotsucceed. If the lease is an incumbrance, your rights are notaffected by the sale.] If we were wrong in having applied to theDistrict Court, let us have a declaration that the lease is notaffected by the sale. We had to apply to the District Court for ashare bf the proceeds in- view of the obiter dictum in Perns v. Petris yxlest we should lose our rights entirely.
Under the Registration Ordinance (No. 14 of 1891), section 16,a lease is 'an incumbrance. In section 643 of the Civil ProcedureCode the words used are “ grantees, mortgagees, lessees, and otherincumbrancers." It shows that lessees are incumbrancers. Whyshould the word receive a different meaning in the PartitionOrdinance? Counsel cited Stroud’s Judicial Dictionary, vol. II.,p* 953.
J, S. Jayewardene, for the respondents.—In either case the appealshould be dismissed. If a lease is an interest in the land, the lessee,has lost his right, by not coming forward at the proper time. If itis an incumbrance, the lessee's rights are not affected by the sale,and the present application to share in the proceeds of sale cannotbe allowed. A lease is an incumbrance. Counsel cited Punchiralav. Menikhamy, 2 Vduma Lebbe v. Sego Mohamado. 3
Cur. adv. v'ult.
December 10, 1913. De Sampayo A.J.—
This is a partition action in which a certain land was by decreeof Court ordered to be sold under the provisions of Ordinance No. 10of 1863. The land was sold on November 18, 1912, and was pur-chased by one Don Nicholas. The purchase money was duly broughtinto Court, and the Court, on December 28, 1912, ordered thecertificate of sale to be issued to Don Nicholas, who has sinceentered into possession of the land. It ^appears that the respondents,who are some of the parties .to the action, had!, by deed of leasedated November 16, 1899, leased to the appellant their interests inthe land for a term of twenty years, commencing from November16, 1899. Prior to the 6ale, the appellant notified his lease to theCourt, but had no objection to the sale and intimated that he wouldtake further steps in due course. Accordingly, on July 18, 1913,he applied by petition, supported by affidavit, that a sum of Rs. 3,000be paid to him out of the share of money due to .the respondents,as damages suffered by him by reason of the sale and consequentloss of possession of the land. The District Judge refused this
> (2906) 9 N. L. B. 232.* i Bal. 7.*2G.L. B. 269.
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application, as I understand his order, on the ground that theappellant should have come as a party interested before the decreewas entered and established his claim, and that the decree for saleextinguished any right he might have had as lessee even to theproceeds.
The appeal is bound to fail whether the appellant is regarded asa party having an interest in the land, as the District Judge thought,or whether he is an “ incumbrancer ” within the meaning of theOrdinance. In the first case the reasoning of the District Judgeis obviously right ; and in the . second case the incumbranoewould attach to the land, notwithstanding the sale, and not to theproceeds sale. The only possible question is, on which ground thedismissal of the appeal should be put. I understand that mylearned brothers, before whom the appeal came, were inclined tothink that a lease Was an incumbrance, but as they thought theopinions to the contrary expressed by the Pull Court in Perns v.Peiris 1 were obiter dicta and required reconsideration, the appealwas put down for argument before a, bench of three Judges. As theappeal must in any case be dismissed, I am afraid that whateveropinions we ourselves may now express will in a sense be meredicta also.
Mr. Grenier, for the appellant, maintained the argument, whichin itself disposes of the appeal, that a lease was an incumbranceand continued to attach to the land, while Mr. Jayewardene, forthe respondents, naturally agreed with that view. I regret that inthe result we have to decide the question on a one-sided argument,and in the absence of the only party interested in the decision,viz., the purchaser Don Nicholas.
I venture to think that Peiris v. Peiris supra is a binding authority,and that the opinions there expressed are in no way mere obiterdicta. In that case the District Judge had added as defendantsin the action certain persons who had a lease from some of theco-owners and. filed a statement of claim, and he had ordered theirinterests to be valued separately and the amount paid out of theshare of proceeds sale of the lessors when the sale of the land shouldhave taken place. . The appeal was taken on the ground that thelessees should not have been .joined at all, as the lease was anincumbrance, to which the sale would be subject, and that the orderfor expropriating the lessees and for compensating them out of theshare of money due to the lessors was therefore wrong. The Courthad accordingly to consider and decide the very question submittedto us for decision. All the three Judges were agreed that “ incum-brance ” referred to in section 8 did not include a-lease, and that thelessees were rightly joined so as to share in the proceeds; asotherwise their rights would be extinguished by the sale, and they-apcordingly approved of the orders of the District Judge. The
» (1906) 9 N. L. R. 231.
1M&
De SampAyoA.J.
SUvav:
Soyaa
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1918.ratio decidendi of that case applies to this case, and I consider, with
padeferefaoe, that it is not competent for us to go-behind that decision.
A.J.I may add that that decision has since been followed. See, for
Silva v.instance, Appiihamy v. Fernando,1 where the lessee sued in ejectment
Scyeasome of the parties to a previous partition action in which- the
proceedings had gone only so far as the decree. The plaintiff hadfailed to put in a claim as lessee, and Wood Benton J. held, onthe authority of Peine v. Perns and certain other cases, that theplaintiff had lost his rights as lessee by force of the decree and couldnot maintain his action.
Even if the matter were res Integra, I would still hold that alease was not an incumbrance which could continue to be a burdenon the land after sale thereof under decree of Court in a partitionaction. The words relied on in this connection are those occurringin section 8 of the Ordinance, which enacts that the commissionerappointed to carry out the sale shall sell the property " subject toany mortgage or other charges or incumbrances which may be onthe same." Here the word “ incumbrance " is used as a synonymof “ charge, " which, again, is, from the context, ejusdem generiswith mortgage. To my mind there is no room for doubt that“ incumbrance." is in this connection used in the sense of security,as was decided in Peine v. Peiris. I venture to think thatno assistance can be derived from the meaning assigned to it incertain cases under the English law, or from its use in other enact-ments or in other contexts. The question is what it can reasonably"be made to bear in section 8 of this Ordinance. After all it is notsection 8 that conserves, the rights of mortgagees or incumbrancers;it only contains directions* to the commissioner as to the conditionsunder which he shall sell the property. It is section 12 that. con-serves Buch rights, and there is no mention there of incumbrancers,
* but only of mortgagees. This seems to me to be an additionalreason for thinking that in section 8, which must be read withsection 12, an incumbrance means nothing more or less ,than amortgage. Section 13 provides for the case of a lease in the eventof an actual partition of the land, but there is no provision whateverfor the case of a lease in the event of a sale. In this connection itis worthy of notice that the present Ordinance No. 10 of 1863 is asubstitution for, and is substantially a re-enactment of, sections 7-19of the Ordinance No. 21 of 1844. In section 16 of the latter Ordi-nance, which corresponds to section 8 of the present Ordinance, theprovision is that the property shall be sold " subject to all suchcharges or incumbrances as then may be on the same," and theword “ mortgage " does not occur at all. But it is obvious that" charges or incumbrances " meant mortgages and other securities,of the same kind, and that the present Ordinance made the meaningmore clear by adding the word * * mortgage " to the expression
> (1909) 1 Cur. L. R. 80.
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used in the older enactment. To me the conclusion is irresistible, ^
that the Ordinance No. 10 of 1863 meant to treat leasehold interests De Sahpaxo
as interests in the land, and provides specially for the case of a
partition, and leaves the lessee, in the event of a sale, to put forward Silva v.
his claims before the decree for sale, but if he omits to do so in time Soysa
his interest is wiped out by the operation of section 9. It is true
that the lessee may not know beforehand whether the land is
going to be partitioned or sold, but he can always put in his olaim,
and his rights will be saved in any contingency. I am unable to
accept the view that, although a lease is an incumbrance attaching
to the land even after the sale, the lessee may,at his option come
in to claim proceeds of the. Sale. La such a case, not only will the
Court be swayed by the will of a private party, but the procedure
will be contrary to principle. A lease either is an incumbrance or
it is not. If it is, then there is no law which will enable the lessee
to draw the proceeds of the land which is sold subject to the lease.
The certainly and finality aimed at by the Ordinance should, £think, be jealously guarded, except in so far as it is otherwise providedin the Ordinance itself. I think that Pern's v. Perns is not adecision merely holding, as suggested, that the Court may allowa lessee to be added as a party and value his interest and pay himout of the proceeds, but that it is a decision that that is the onlypossible course, the lessee's interest, just as much as a servitude orusufruct, being an interest in the land, and not a mere incumbranceon it. The lessee, in my opinion, has no option but to make hisclaim, and, to use the words of Wootl Benton J. in Appuhamy v.
Fernando, it is his “ right and duly to set up his claim in thepartition proceedings.” For this reason I think the appeal shouldbe dismissed with costs.
Pereira J.—
This is an action under the Partition Ordinance. An order for asale of the land which was the subject of the action was entered upon May 1, 1912. More than four months thereafter the appellant,professing to be a lessee of the land, informed the Court, throughhis proctor, that he had no objection “ to the sale taking place, ”and that he “ would take further steps. ” He did nothing untilafter the sale of the land by the commissioner appointed for thepurpose. On April 4, 1913, that is, after the sale had taken place,-the appellant moved that the proceeds of sale which had then beendeposited in Court be not paid out without norice to him. There-after lie moved, with notice to the respondents, that a sum ofBs. 3,000 out of the proceeds be paid to him as compensation thathe claimed to be entitled to as lessee by reason of the sale of theland under the order for sale ; and the present appeal is from theorder of the District Judge disallowing this application.
1918.
Pbebhkba.JSilva v.
Soy**
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It appears to be extremely doubtful whether the appellant orhis co-petitioner in the Court below can be deemed to be a lesseeoh the lease produced, but that question need not at present begone into. I shall assume for the purposes of this judgment*, anddo no more than assume, that the appellant is entitled to all therights of the lessee on the lease produced. The question is whether,'in view of the stage of the proceedings in which he came into therecord, and the circumstances in which he did so, he is entitled toshare in the proceeds of sale. Section 18vof the Partition Ordinanceexpressly and clearly conserves the rights of lessees of the properlyor any part-or 6hare of the property directed to be partitioned underthe Ordinance. This appeal was first argued before my brotherEnnis and myself, and it seemed to us that the underlying principleof section 18 of the Ordinance was to leave leases untouched by theOrdinance, and that, therefore, while section 13 dealt with the caseof leases in the event of a partition, it was intended to provide for thecase of leases in the event of a 6ale by section 8 of the Ordinance.That section enacted' that a sale under the Partition Ordinanceshould take place if it be a sale at which the public might bid** subject to any mortgage, charge, or incumbrance ” which then mightbe on the property ; and it seemed to us that the word “ incumbrance ”was used in the section to meet just such a case as has now occurred ;in other words, that the word “ incumbrance ” was used to includea lease. But in view of certain dicta in the judgment in the caseof Peine v. Petris 1 citedto us,we thoughtthatthe caseshould
be reserved for argumentbefore- afuller Bench ;and theappeal
was accordingly re-arguedbeforeaBench ofthreeJudgeson the
9th instant. In the caseciteditwas heldthatthe Court had
power to add as parties to a partition suit persons holding leasesfrom some of the co-owners of their undivided shares, and it wasalso held that it was competent to the Court, where it decreed asale under the Partition Ordinance, to order the interest of lesseeswho are allowed to intervene to be appraised separately and theamount to be deducted from the proceeds of sale. That ruling•coincides with the view taken by myself in an older case, namely;the case of Grigoris v. Meedin. 2 There I held that the comprehensivenature of the provision of section 9 (which provided that a decreefor partition or sale should be good and conclusive against all personswhomsoever, M whatever right or title they had or claimed to have "in the property dealt with) showed that once a partition suit wasfloated by a party entitled to do so, there was no limit to the interestsin assertion of whicfr persons might claim to be joined as parties.In the case of Peiris v. Petris 1 the question before the Court waswhether a lessee should be allowed to intervene in a partition suitbefore judgment, and whether, in the words of Middleton J., the** Court was entitled to order a lease upon land which i.t has 1
1 (1906) 9 N. L. R. 231.
2 1 Bal. 177.
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empowered to sell under the Partition Ordinance to be oancelied and 1M8.valued and the proceeds paid to the lessees.*' No doubt the Judges ^^
who took part in the appeal expressed in the course of their judgment
their opinions that a “ lease *’ was not an “incumbrance ’* in thesense in which that word was used in section 8 of the Ordinance;but whether that was so or not, the decision on the substantivequestion involved in the case would obviously have been the same.
Whether a sale under the Partition Ordinance took place subject toa lease or not, there was no objection to the lessee being made aparty to the action and his rights adjudicated upon, and a suitableorder being made with reference to them. But in the present casewe are concerned with the situation that the lessee did not moveto be added as a party, and he was in fact no party to the decreefor sale in the case. He chose to stand out until the last moment.
Can it be said that his rights under the lease are in any way affectedby the decree for sale? Had the decree been a decree for partitionhis rights would not have been affected. Section 13 of the Ordinanceclearly says so. It is said that the fact that the order was that theland should be sold made a difference. To my mind, as regardsthe rights of a lessee in the case of a decree for sale, section 8 of theOrdinance made in effect the same provision as section 13. Thedirect question in the case is whether the word “ incumbrance ’*in section 8 includes a lease. [Respondents’ counsel made referenceto the first three lines of section 12, which enacted that nothing inthe Ordinance should affect the right of any mortgagee of the landwhich is the subject of partition or sale, and argued that there wasno 6uch provision with reference to a lease. But this is a perfectlysuperfluous provision. Section 8 expressly provides that a saleshould be subject to a mortgage, and section 12 itself provides thata partition should be subject to a mortgage, and I do not think thata superfluous provision of this nature should be allowed to influencethe decision of the question as to a lease. Does, then, the term“ incumbrance ” in section 8 include a lease? A lease is undoubtededly an incumbrance on the land leased. It is so referred to usually,and it has been so held in more than one case (see, for instance,
Baggett v. Meux x), although its provisions may sometimes be suchas not to make it an incumbrance. The Land Transfer Acts containprovisions to remove certain leases from the category of incumbrances.
In PunchiTala v. Menikhamy 2 it was held that where a Courtdecreed a land sought to be partitioned to be sold, it was desirableto decree the land to be sold free of the “ incumbrance ’’createdby the •“ lease ’’ pleaded in the case. In Uduma Lebbe v. SegoMohamado 3 leases are repeatedly referred to as “ incumbrances, ’’and in section 71 of Ordinance No. 3 of 1907—ah Ordinance alreadypassed though not proclaimed—clearly leases are included 'in theterm “ incumbrances.” Although, as observed above, the terms
x 13 L. J. Gh. 228.* 4 Bal. 7.?2C. L. R. 159.
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4918. of certain leases may be such as to remove them from, the categoryj of *4 incumbrances ,f on land, clearly in view of our law as to theduties of vendors of ^landed property who are, inter alia, required^ deliver vacant possession of the property sold to the vendee,a lease in the usual terms cannot but be regarded as anincumbrance.
For the reasons given above, the land, which was the subject of thepresent case, must be deemed to have been sold subject to the leaseproduced by the appellant, and he has therefore no right to the. proceeds of the sale, and I'would dismiss the appeal with costs.
Ennis J.—I agree.
Appeal dismissed.