039-NLR-NLR-V-20-SUPPRAMANIAM-CHETTY-v.-WEERASEKERA.pdf
( 170 )
1918*
[Full Bench]
Present: Ennis, Shaw, and De Sampayo JJ.
SUPPRAMANIAM GHETTY v. WEERASEKERA.
468—D. C. Negombo, 12,251.
Mortgage—Address not registered bymortgagee—Action by mortgagee
against mortgagor without joining puisneincumbrancer—Sub-
sequent action by mortgagee against puisne incumbrancer to haveproperty declared bound for his mortgage debt—Civil Procedure' Code, ss. 640 to 644.
A mortgagee who has failed to register his address under section644 of the Civil Procedure Code, ■ and who has * sued his mortgagorand obtained a decree against him, cannot afterwards . bring another,action against a puisne incumbrancer or. grantee claiming a decla-ration that the property in his possession is bound and executablefor the mortgage debt.
HE facts are set out in the judgment of "Ennis J.
A. St. V. Jayawardene (with him J. S. Jayawardene), lor firstdefendant, appellant.—The plaintiff did not register his address, asrequired by sections 643 and 644 of the. Civil Procedure Code. Ifhe had done so, the first defendant would have notified to him thathe had purchased the mortgaged property.
The plaintiff having failed to give notice of his action on themortgage bond to the first defendant, he is not bound by the decreein favour of the plaintiff. The plaintiff cannot now bring a separatehypothecary action against the defendant to have it declared thatthe mortgaged lands- are bound and executable for the mortgagedebt. Section 640 of the Code contemplates only one action forthe realization of the moneys due on a mortgage bond, and themortgagor is to be sued as a party defendant in such action! Theplaintiff has not made'the mortgagor a party to this action, nor canthat be now done, as he has been already sued in the original action.The object of the Code is to avoid a multiplicity of actions, and theplaintiff is debarred by section 34 of the Code.
Counsel cited Puncki Kira v. Sangu,1 Petris v. Weerasinghe. Weerappa Ghetty v. Arunaselam Ghetty,* Ramanathdn Ghetty v,Gassim,4 Elyatkamby v. Valliammai 5; Thambaiyar v. ParamusamyAiyar,6 and Bank of England v. Vagliano.7
1 (mo) 4 N. L. B. 42.4 (1911) 14 N. L. R.177.
* (1906) 9 N. L. B. 359.* (1913) 16 N. L. B. 210.
3 (1909) 12 N. L. B. 139.• (1917) 19 N. L. B. 385.
inaan a a. 107.
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Samarawickreme (with him Gro8B-Dabrera), for plaintiff, respond'ent.—The provisions of sections 643 and 644 of the Code .are notimperative. They do not have the effect of doing away altogetherwith the common, law, and do not impose a new burden on a mort-gagee, but rather afford certain facilities in obtaining a mortgagedecree (see Bodia v. Hawadia *). Under the common law the mort-gagee could bring two actions, one against the mortgagor personally,and the other, a hypothecary action, against the property. He couldhave done this in any order he pleased. The change introduced bythe Code was that the mortgagee should first sue the mortgagor,but it nowhere says that another and subsequent' action against athird party in possession or a purchaser from the mortgagor doesnot he. That such an action lies has been recognized in severalcases. The mortgagor is not a necessary party to this action. Hehas already been sued, and a decree obtained against him.
Counsel cited Samaranaihe v. Samaraweera,2 Sleema Lebbe v.-Banda* De Saram v. Perera* No. 9,810—D. C., Kandy,5 Wije-singhe v. Don David,1 Mutturamen v. Massilamany,7 and Silva v.Ghinawardena*
1918.
Suppra-maniamChetty v.Weerasekera
A. St. V. Jayawardene, in reply.
'Gut. adv. vult.
February 28, 1918. Ennis J.—
This case raises a difficult question as to the effect of chapterXLYI of the Civil Procedure Code, relating to the realization ofmoney secured on mortgage.
On May 4, 1909, one Christogu Fernando mortgaged certain landswith the plaintiff; the plaintiff put the bond in suit, the landswere sold in execution, and plaintiff obtained Fiscal’s transfers' onSeptember 24, and 30, 1915. Meanwhile Christogu Fernando had,on February 3, 1914, sold the lands to the second defendant, and,under a decree in a partition suit, the second defendant was subse-quently allotted a divided portion in respect of his purchase fromChristogu Fernando. On August 7, 1916, the second defendantconveyed this portion to the first defendant.
The second defendant was not a party to the plaintiff’s action onthe mortgage bond, and the plaintiff was not a party in the partitionsuit. The plaintiff, when he registered his mortgage, did not registerand address for the service of notice, as required by section 643 of theCivil Procedure Code. The defendants also failed to register anaddress when the subsequent deeds to them were registered.
Some time after the plaintiff had purchased he/ sought to have the -sale in execution and the decree in the mortgage suit set aside under
1 (1913)16 N. L. R. 463.5 (1897) 1 Browne. 121.
3 (1897)2 N. L. R. 368.* 2 Matara Cases 36. ■
3 (1898)1 A. C. R. 72.» (1913) 16 N. L. R. 289.
* (1897)1 Browne 117.8 (1915) 18 N. L. R. 241.
(• 172 )
1918.
Ennis J.
Sikppra-, xmaniamOheUy v.Weerasehera
, the -provisions of the Civil Procedure Code. He was, however,unsuccessful. 'He then iustituted the present action, to have thelands mortgaged-to him declared bound and executable for theprincipal sum and interest amounting to Rs. 1,500. The mort-gagor, Christogu Fernando, Was made a party to the suit. Thelearned District Judge found in favour of the plaintiff, and the first .defendant appeals.
My brothers Shaw and De Sampayo have referred this ease to theFull Court, as there are a number of conflicting decisions as to theeffect of a failure by a mortgagee to register an address. Prior tothe enactment of the Code of Civil Procedure two actions were opento a mortgagee: he could sue in a personal action against the mort-gagor for the recovery of the amount of the debt, or^ he couldinstitute a hypothecary action to have the land sold in execution.Chapter XLVI of the Code enacted (section 640) that in any action bya mortgagee for the “ realization of moneys secured to him upon amortgage ” the jnortgagee “ shall M sue the mortgagor “ as defend-ant. ” Section 643 provided that the mortgagee should give noticeof the action to any subsequent grantee or incumbrancer who hadduly registered his deed and “ furnished an address for the serviceof such notice.*' Section 644 then provided that persons so noticedcould apply to be joined as defendants in the action, and if theyfailed to . do so, that they should be bound by the decree; but itwas subject to the proviso that the mortgagee had duly registeredhis mortgage and had “furnished an address to-the Registrarof Lan'ds “ and to every subsequent grantee or incumbrancerwho had given him notice that they had duly registered N theirdocuments of title. The question is whether the action pro-vided by chapter XLVI "supersede? entirely the two common lawactions.
Many of the earlier cases relating to actions by mortgageesappear to have been decided as if the two common law actions werestill available (Samaranaike v. Samaraweera,x Sleema. Lebbe v.Banda,1 2 3 4 De Saram v. Per era,5 No. 9.810—D. G. Kandy/1 Wijesinghev. Don David 5); and my brother De Sampayo, in Bodia v. Hawadia*held that the actio hypothccaria was available, in addition to theaction under chapter XLVI of the Code, and he cited an expressionof opinion by Lascelles C.J. in Bamanathan Ghetty v. Cassini7 basedon Mayappa CUetty v. Raivter.8
It is to be- observed that in Sleema Lebbe v. Banda 2 Lawrie J.expressly said that the plaintiff had not availed himself of the pro-visions of chapter XLVI, which had not been mentioned at all inthe course of the argument.
1 (1897) 2 N. L. 12. 368.
* (1SS*) 1 A. C. 12. 72.
3(.1897) 1 Browne 117.
4(1897) 1 Broume 121.
2 Matara Cases 36.
• (1913) 16 N. L. R. 483.
(1911) 14 N. L. R.117.
6 (1903) 6 N. L. 12. 220.
( 173 )
la Pattiriani o. Kanapaiti Puttc, No. 1,798—D. (*. Batticaloa,'Bonser C.J*. dQubted the correctness of ‘the earlier decisions, andin Puncki Kira v. Sangu 2 he held that chapter XL*VI. of the Codewas plainly intended to alter the old procedure.
In Peiris v. Weerasihghe * it was held that compliance with therequirements of the first proviso to section 644 of the Code was acondition precedent to a mortgagee claiming the benefit of the otherprovisions of the section, and this was followed in Weerappa Ghettyr. Arunasclani Ghetty.1
In Ramanathan Ghetty v. (Jassim 5 Loscelles CrJ. said: “ Sections643 and 644 of the Civil Procedure Code were clearly enacted withthe intention of enabling all rights with regard to the mortgagedproperty coming into existence subsequently to the date of themortgage, to be disposed of once and for all in the course of themortgage action and he held that a mortgagee having failed togive notice of his mortgage action to a subsequent lessee who hadduly registered, and having failed to join him in the action, couldnot bring a subsequent action against the lessee to have the lessee’sinterest in the land declared bound and executable for the balance,of the debt.
In Elyatamby v. Valliammai6 it was held that a subsequent doneewhose deed had not been registered obtained a title free of themortgage by the neglect of the mortgagee to register his address.Wood Renton J. in his judgment said:“We can, however, in-
my opinion, give effect to Peiris v. Weetasingke,1 2 3 and to the spiritof sections 643 and 644 of the Civil Procedure Code, only if we heldthat compliance by the mortgagee with the requirements' q£ ..thosesections is a condition precedent to a puisne incumbrancer beingbound either directly or indirectly by the decree iri the mortgageaction."
In Mutturamen v. Massilamany 7 it was held that the registrationof the mortgage bond enured to the benefit of a purchaser in execu-tion of the mortgage decree as against a lessee whose lease wasdated prior to the mortgage, but who had" lost priority by failing toregister till after the mortgage bond had been registered; and inSilva v. Gunawardena,* where there was a gift of land and a subse-quent mortgage of the same land, registered before the deed of gift,but neither the mortgagee nor the donee had registered an addrpss,the mortgagee obtained judgment on his bond without making thedonee a party, and it was held that the donee was bound by themortgage decree, and that the title of the purchase at the executionsale prevailed over the title of the donee. These two cases, however,dealth with priority of registration rather than the effect of chapterXLVL by* itself.■
1(2897) 1 Browne 229.
2(1900) 4 N. L. R. 42.
*(1906) 9 X.L. R. 359.H1909) 12 X. L. R. 139.
•> (1911) U N. L. R. 177.• (1913) 16 X. L. R. 210.7 (1913) 16 N. L. R. 289.d (1915) 18 N. L. R. 241.
1918.
Knxis J.
Suppra-maniamGhetty v. ,Weeraeekerc
16
( 174 )
1918.
Ennis J.
Suppra-maniamChetty v.Weerasekera
In Thambaiyar v. Paramusamy Aiyar 1 it was held that theheirs of a deceased mortgagor could not be sued without joiningthe legal representative, even when the estate is under- Rs. 1,000'in value.
The tendency these later cases has been to require a strictcompliance with the provisions of chapter XLVI. of the Civil Pro-cedure Code as between the mortgagee and all subsequent granteesor incumbrancers, and prior grantees or incumbrancers who registerafter the mortgage has been registered are not regarded as subsequentgrantees or incumbrancers, and are bound by the mortgage decree,even when the mortgagee has failed to register an address.
I am of opinion, that the view taken by Lascelles C.J. in Kama-nathan 'bhetty v. Gassim 2 as to the intention of the Legislature inenacting chapter XLVI. of the Code is the correct view. The actionunder chapter XLVI. was intended to provide one action only “ torealize moneys due or secured upon mortgage/’ and to do away withthe multiplicity of suits. It provides that the mortgagor should bethe defendant, and subsequent grantees or incumbrancers were- toreceive notice of the action, and they were to be bound by the decreein the action, whether they came in as defendants or not, providedthe mortgage had registered his address. Conversely it would seemthat if a mortgagee neglected to register his address, subsequentgrantees or incumbrancers would not be bound by the decree,and the mortgagee would be left without a remedy ■ againstthem.
I am of opinion that the action under chapter XLVI. supersededthe common law remedies, and that it is the only action now avail-able to a mortgagee to realize the money due on a mortgage.By neglecting the procedure and failing to register his address theplaintiff-respondent has lost his remedy against the subsequentgrantee.
I would allow the appeal, with costs.
Shaw J.—
The question arising for our determination in this* case is whethera mortgagee who has failed to provide an address to the Registrarof Lands under section 644 of the Civil Procedure Code, and whohas sued his mortgagor and obtained a hypothecary decree againsthim, can afterwards bring another hypothecary action against apuisne incumbrancer or grantee claiming a declaration that theproperty in his possession is bound and executable for the mortgagedebt.
The question is a somewhat difficult one, and it is impossible to.satisfactorily reconcile all the decisions on the subject; but I thinkthe question must be answered in the negative; and that the decision1 {1917) 19 N. L. R. 385.2 {1911) 14 N. L. R. 177.
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in Ramanathan Chetty v. Gassim,1 which is a direct decision on thepoint, is correct, and I agree with the opinion there expressed byLasceUes C.J., that sections 643 and 644 of the Civil Procedure Codewere enacted with the intention of enabling all rights with regard tothe mortgage property coming into existence subsequently to thedate of the mortgage to be disposed of once and for all in the courseof the mortgage action.
To hold that a second action cannot be brought seems to be thenecessary consequence of the recent Pull Court decision in Thambai-yar v. Paramusamy Aiyat,a affirming the decision come to in PunchiKira v. Sangu,3 that a hypothecary action is not properly constitutedunder the provisions of the Code unless the mortgagor, if he is alive,is a party, or, if he is dead, -then his executor or administratoror some party appointed by the Court. If the mortgagor or hisrepresentative has been sued and a decree obtained against him in• the first action, it appears clear to me that he cannot again besued in a subsequent action in respect of the same matter.
Chapter XLVI, of the Code is one of a group of chapters regulatingthe procedure in various special causes of action, and provides theprocedure—and the only procedure—by which actions to realizemoney' due or secured upon mortgages can now be brought. Itdoes not, as was pointed out by Bonser C.J. in Punchi Kira v.Sangu,3 take away the old common law remedies, but renders itnecessary for them all to be sought in one action.
The mortgagee is fully protected by the procedure provided. Ifhe not only registers his security, but also provides the Registrar ofLands with ah address according to the. provisions of section 644,his decree binds all incumbrancers or grantees subsequent tohis mortgage, but if he neglects to do so, it does not. Weerappa Chettyv. Arunaselam Chetty* Petris v. Weerasinghe,5
I would, allow the appeal, and enter judgment for the defendants,with costs.
1918.
Shaw J.
Suppra-maniamOhetty v.Weerasehera
De SampaYO J.—
The facts of this case appear in the judgments of my learnedbrothers, and I need not repeat them. The point for. decision isthe same as that which I considered in Bodia v. Hawadia.* In thatcase I examined the cases in which it had been held that the registra-tion of an address by a mortgagee was a condition precedent to hisobtaining a binding decree against puisne incumbrancers, and Iventured to express an opinion that, while that was so, if the puisneincumbrancers were not parties to the mortgagee’s action againstthe mortgagor, the mortgagee was not prevented from bringinga separate hypothecary action against thepuisne incumbrancers.
1 (1911) 14 N. L. S. 177.* (1909) 12 N.L. R. 139.
(1917) 19 N. L. R. 385.5 (1906) 9 N. L. R. 359.
3 (1900) 4 N. L. R. 42.6 (1913) 16 N.L. R. 463.
i no )1918.
Dr riAMrAYoJ. .
tiuppra-mcmiamChatty v.Weerasehera
That view may be further supported by such cases as Sleema Lebbev. Banda1 and Wijesinghe v. Don David,2 which allowed to a mort-gagee the right to bring a hypothecary action against persons whosuccessfully claimed the property when seized in execution of thedecree obtained against the mortgagor. It appeared to me that‘ the change introduced by chapter XLVI. of the Civil ProcedureCode only took away the option available to a mortgagee under theBoman-Dutch law to bring the hypothecary action in the first-instance against subsequent purchasers or parties in~ possessionwithout suing the mortgagor for the debt at all, and that the Coderequired that in every case the mortgagee should sue the mortgagorfor the debt, and if he wished to get a binding decree against puisneincumbrancers in the same action, he should in that case observethe requirements of section 644 of the Code and register an'address.Now that the point has come up again for final determination,I recognize the importance of putting an end to controversy by anauthoritative decision. While the exhaustive argument in this casehas, I confess, not induced me to alter materially the view I expressedin Bodia v. Hawadia,3 .1 agree that the ruling in RamanathanGhetty v. Cassim * should be followed, and that accordingly this appealshould be allowed, with costs.
Appeal allowed.