017-NLR-NLR-V-39-JOHN-APPUHAMY-v.-WILLIAM-APPUHAMY.pdf
MOSELEY J.—John Appuhamy v. William Appuhamy.
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Present: Moseley J. and Fernando A J.
JOHN APPUHAMY v. WILLIAM APPUHAMY282—D.C. Colombo, 2,886
Bond—Action on mortgage bond which is void—Right to recover on personalcovenant—Bond conditioned for the payment of money—Prescription—Ordinance No. 22 of 1871, s. 6.
An action may be maintained upon the personal covenant to paymoney contained in a mortgage bond, which is void lor the reason that itwas executed pending a partition action.
Such a bond is one conditioned for the payment of money within themeaning of section 6 of the Prescription Ordinance.
Sidambaram Chetty v. Jayawardana (4 Tambyah 85) and Tissera v.Tissera (2 N. L. R. 238) followed.
^^PPEAL from a judgment of the District Judge of Colombo.
A. Rajapakse, for plaintiff, appellant.
M.C. Abeyewardene, /or defendant, respondent.
Cur. adv• vult.
' February 10, 1937. Moseley J.—
By a mortgage bond, dated February 21, 1929, the defendant mortgageda certain share of land which was at the time the subject of a partitionaction. Action was filed on the bond on March 5, 1935. . The defencewas that by virtue of section 17 of the Partition Ordinance, No. 10 of 1863the hypothecation while partition proceedings were pending was void.It was further contended that in the event of the plaintiff being regardedas an unsecured creditor, action was prescribed by section 7 of thePrescription Ordinance, No. 22 of 1871.
The learned District Judge found that the hypothecation was void,that no money could be due on that mortgage bond, and that the question•of prescription did not therefore arise.
From that judgment the plaintiff appeals. His first • point is that,•even if the hypothecation of the land is bad, the personal covenant topay the debt remains. On this point we were referred to the case ofSidambaram Chetty v. Jayewardana which case had been considered bythe District Judge and held not applicable. This case seems to provideample authority for the proposition that only the hypothecation is voidand not the instrument containing it.
Counsel for the respondent sought to distinguish the circumstances ofthe present case and submitted that in the case before us there is nodistinct claim on the personal convenant, whereas in Sidambaram Chetty v.Jayewardana (supra), the plaintiff avoided recourse to the hypothecaryaction, and sued only on the personal covenant. In the plaint, however,there is a perfectly clear claim for payment on the personal covenant,and I have no hesitation in following the authority and finding that,although the hypothecation is void, there still remains to the plaintiff anaction on the promise to pay.
1 4 Tambyah 85.
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MOSELEY J.—John Appuhamy v. William Appuhamy.
This brings us to the second point, namely, whether or not the action,on the promise is prescribed. The defendant’s contention is that being amere promise to pay, it falls under section 7 of the Prescription Ordinance,and that the action, not having been brought within six years, cannot bemaintained.
Counsel for the plaintiff argues that the document is a bond conditionedfor the payment of money within the meaning of section 6 of the Ordi-nance in which case the action • has been commenced well within thestatutory period of ten years.
We are thus faced with the vexed question as to what is a bondcondition for the payment of money.
We were referred to the case of Tissera v. Tisserain which case thedocument under consideration contained a promise to pay a sum ofmoney with interest on demand and the person executing it boundhimself, his heirs and executors and all his properties. It was held byBonser C-J. that the document was a “ general conventional mortgage ”and he had no doubt that it fell under section 6. He was also of opinionthat it was a bond “ conditioned for the payment of money ”, the meaningof which he went on to say “ is that the bond is to be given for securingthe payment of money, and it seems to me that what is technically asingle bond, i.e., a bond without any defeasance or condition annexed, isas much within section 6 as a double or .conditional bond.”
This view was considered in Seman v. Silva* by Ennis J. who said',“ I am unable to agree that this case is an authority for the proposition-that a document notarially executed, containing merely a promise topay money, is a bond conditioned for the payment of money. In myopinion the expression refers only to documents in which there is acondition that money is to be paid by way of security. ”
The document then under consideration was a lease which de Sampayo J…was quite sure “ is not a bond. Its main purpose it not to secure thepayment of money, but to vest the right of possession of a land for acertain period in the lessee ”.
It can hardly be controverted that the main object of the document inthe case before us is to secure the payment of money.
Counsel for the respondent referred us to the case of Sinnamy Aiyer v.Balampikai Ammo.*, in which all the previous authorities were reviewedat length. The document in that case was an agreement to convey landand provided, in default, for the payment of a sum of money as the valueof the land and a further sum by way of liquidated damages. Thef document was held not to be a “ bond conditioned for the payment of• money
In Seman v. Silva (supra), de Sampayo J. observed that “ an instrumentshould be construed as a bond or the contrary according to its substanceand real characteristics ”. That is a proposition which commends itselfto me and I feel constrained to follow the view expressed by Bonser C-J.
which' I have quoted above.
1 2 N. L. Ii. 238.
3 31 N.. L. R. 47.
2 18 -V. L. R. 397.
FERNANDO A.J.—Parangoden -o. Raman.
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In my opinion the mortgage bond in this case must be regarded as a“ bond conditioned for the payment of money ” and as shch falls withinsection 6 of the Prescription Ordinance. The action therefore is notprescribed, and the plaintiff, in the absence of any defence on the merits,should succeed.
The appeal is allowed with costs. The judgment of the District Courtis set aside and judgment will be entered for the amount claimed withcosts.
Fernando A-J.—I agree.
Appeal allowed.