026-NLR-NLR-V-20-WIJESEKERA–v.-RAWEL.pdf
( 126 )
1917.
Present: De Sampayo J.
WIJESEKERA v. RAWAL.26—G. R. Ghilaw, 15,704.
Mortgage—Gan mortgagee sell other property before selling mortgagedproperty ?
Even where a decree on a mortgage merely declares the propertybound and executable, and does not specially direct the mortgagedproperty to be sold in default of payment of the debt, the creditorshould first realize the mortgage, and can resort to the otherproperty only for any deficiency, unless the debtor consentsotherwise.
T HE facts are set out in the judgment.
Asserappa, for plaintiff, appellant.
Sansoni, for defendant, respondent.
Gut. adv. vult.
February 28, 1917. De Sampayo J.—
This appeal raises an important and, so far as I know, new pointin the law of mortgage. The original plaintiff, who sued on amortgage bond, assigned the decree to the appellant, who has beensubstituted as plaintiff on the record. On the application of theappellant a writ of execution was issued to the Fiscal, but- theappellant subsequently moved that the Fiscal be directed to sellproperty other than the specially mortgaged property. Thismotion was opposed by the second defendant, who had granted themortgage, and the Commissioner disallowed it.
It is contended on behalf of the appellant that he is entitled to sellthe property of the judgment-debtor in any order he may choose.This no doubt is so in the case of an ordinary decree. It is also true
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that, where several properties are mortgaged, the mortgagee maywell sell these properties in any order he pleases. (Wickremesinghev. Punchi Nona,1) But has he a similar right to sell unmortgagedproperty before exhausting the mortgaged property ? No localdecision on this question has been cited to me, nor can I find any.The argument on behalf of the appellant is that, as the decree for therealization of a mortgage includes also a decree for money, the ordinaryincidents of a decree for money arise. It seems to me, however,that there is a broad distinction between the two cases in regard tothe mode of execution, and that the question must be decided uponother considerations. There would have been no difficulty if thedecree in this case had followed the form which has been generallyadopted since the enactment of the Civil Procedure Code, for thenthe decree would have directed that in default of payment of thedebt the mortgaged property should be sold and the proceedsapplied in and towards the payment of the amount of the debt, andin the event of such proceeds not being sufficient for the payment infull of such amount, the judgment-debtor should pay the deficiency,with interest, until realization. If a mortgage decree is in that form,I think that the mortgaged property must first be realized, unless,perhaps, there is some good reason to the contrary, such as lawfulclaims of third parties, in which case, no doubt, the Court will givefurther directions. But the decree in this case is in the well-knownform of decree whereby the mortgaged property is declared speciallybound and executable, and contains no particular directions as toits sale. This, I may say, is the proper form of mortgage decreeunder the Roman-Dutch law, which, subject to certain modificationsirrelevant to the present case, is still applicable here, and Mohotte v.Dissanayake ,2 so far from considering that form of mortgage decreeto be no longer applicable, held that an order for sale in terms ofsection 201 of the Civil Procedure Code was a. substantial compliancewith it. The question, therefore, is whether it is open to themortgagee, in the first instance, to seize and sell other property thanthe property mortgaged, and by the decree declared specially boundand executable. Voet 20, 1, 15 discusses the case of a creditor whohas a special mortgage of some property, and also a general mortgageof the other property of the debtor, and says that the creditorcannot, without first realizing the special mortgage, resort to theother property as against creditors, to whom the latter propertyhas been subsequently bound by special mortgage. But he adds:Plainly, if the other creditors do not oppose, this liberty of firstfollowing up the goods generally mortgaged is not to be denied tothe creditor, however much the debtor may object and desire thatthe goods specially mortgaged be sold.” (Berwick*8 translation,2nd ed.t p. 292.) This, however, appears to be limited to a casewhere there is both a special and a general mortgage, and comes
1917.
De SampayoJ.
Wijeseherav. Batval
J {1912) 2 C. A. C. 43.
(1910) 13 N. L. B. 70.
( 128 )
1917.
Da SampayoJ.
Wijesekerav. SattxU
within the principle that, where there are several things mortgaged,the creditor is entitled to proceed first against any one of them inhis discretion. Code 8, 28, 9, which deals with the case of a specialmortgage without reference to any other mortgage, runs thus:
“ Qua specialiter vobis obligato sunt, debitoribus detrectantibussolutionem, bona fide debetis et solemniter vendere. Ita enim apparebit,an ex pretio pignorie debito satisfieri possit. Quodsi quid deerit, nonprohibemini cetera etiam bona jure eonventionis consequi.” The lawso laid down seems to me to provide generally that the mortgagedproperty should first be discussed before resorting to the otherproperty of the debtor. The rule of practice in Holland appears tohave been in accordance with this view. Nathan, vol. 4, art. 2238,citing Van der Linden's Judicial Practice, 3, 6, 11, and 12, says: " Ifthe judgment-debtor has no money -wherewith to pay, he maysatisfy the judgment by pointing out goods, movable or immovable,wherewith the writ may be satisfied, provided that on a cursoryinspection the same shall appear sufficient for the purpose. Where,however, a judgment declares as executable goods speciallyhypothecated to secure the creditor’s claim, the sheriff must first ofall take such goods in execution without requiring the debtor topoint out disposable goods, and he may proceed to sell the goodsso hypothecated. ” Nathan here deals with the practice in SouthAfrica at the present day. Van Zyl’s Judicial Practice 207 isto the same effect, for it is there said:. “ By the Boman law animalsand movables had first to be exhausted before any recourse could behad to the sale of landed property. It is the same with us when theplaintiff has no hypothec or pledge. But when property has beenspecially mortgaged, that property must first be sold in executionbefore any other can be taken, and only for the deficiency can otherproperty be taken.” From all this the interesting fact emergesthat the form of mortgage decree, generally adopted since the CivilProcedure Code, has introduced nothing new, but has substan-tially reproduced the Boman-Dutch procedure. In this state ofauthorities it must, I think, be held, in the absence of any localdecision or rule of practice to the contrary, that, even where thedecree on a mortgage merely declares the property bound and'1executable, and does not specially direct the mortgaged property tobe sold in default of payment of the debt, the creditor should firstrealize the mortgage, and can resort to the other property only forany deficiency, unless, of course, the debtor consents otherwise.
For these reasons the appeal is dismissed, with costs.
Appeal dismissed.