RODRIGO et al. v. KARUNARATNA et al

107-NLR-NLR-V-21-RODRIGO-et-al.-v.-KARUNARATNA-et-al.pdf


( 860 )
1980.
i
Present: Bertram C.J. and De Sampayo J.
RODRIGO et al. v. KARUNARATNA et al.
263—D. C. Negombo, 12,936.
j
Estoppel—EvidenceOrdinance, s.115—Intentionally—Ignoranceof the
truth of factmisrepresented—Mustconnection between action
and misrepresentation bedirect ?—Civil Procedure . Code, ss.- 648
and 644—Husband party to mortgage action—Is wifebound by
decree?
A obtained a transfer of a land which was subject to a mortgage.The mortgagee obtained judgment against the mortgagor withoutmaking A a party, and A was consequently not bound by the decree.After decree A approached the first defendant, and persuaded himto take a transfer of the decree, with a -new to securing him timeto payoff thejudgmentdebt. On Anot paying tbe amount due
on thedecree,the firstdefendant assigned the decree to B, who
subsequently bought the land at the Fiscal'ssale in execution.
Thereafter first defendant bought the land from B.
In a contest between tbe first defendant and A,—
Held,that Awas notestopped fromdenying that she was bound
by the mortgage decree. '^
To establish an estoppel, it must be proved that the action takenby theparty seeking toestablish theestoppel was directly connected
with the false impression caused by the representation or. conductof the party sought to be estopped. The representation or theconduct producing theimpression must be,ineffect, aninvitation
to the person affected by it to do a particular act.
But it need not be proved that the party sought to be estoppedknewthe truth aboutthe facts which hebyhis statement orhis
conduct misrepresented.
T
HE plaintiff brought this action for the partition of an allot-ment of land alleging that he was entitled to twenty-five/
thirty-second share, and that the first defendant was owner ofseven/thirty-second share. The fourth and fifth defendants (appel-lants) claimed this seven/thirty-second share. The District Judgeheld in favour of the first defendant. The facts are fully set outin the following judgment of the District Judge:—
The question to be decided at this trial is whether the first defendantbecameentitled to seven/thirty-seednd sharebypurchase?Forthe
purposes ofdeciding thepresentdispute, it issufficientto state 'the
following facts:—
Davidbecame entitledto seven /thirty-secondofthis land,. andhe-
transferredthat sameshareto. Leonard.'Leonard, subsequently
mortgaged that share to Suppramaniam Che tty, who put the mortgagebond in suit. After certain transactions that share devolved on •’ the
( 361 )
first defendant. Some time after the mortgage referred to there wasa partition deed between Leonard and his brother Wilfred, in whichthis mortgage bond was ignored. Subsequently there was a deed ofexchange executed between Leonard and David’B wife Annie, wherebythe land in question was given away to Annie. Subsequently Annieand her husband David mortgaged twenty-five/tbirty.-second of lot Z 2to the plaintiff in this case.
1920.
J todrigo v.Karvnantna
AdmittedlyLeonard wasa minorat thetime ofthe mortgagein
favour of Snppramaniam Chetty. Within afew months after the
execution ofthe mortgagebond hebecamea major.The questionis
whether that mortgage bond was void and of no effect. The law onthis point has been rather doubtful, but the last decision reported in19 N. L. R.496 laysdown that a contractbya minor isnot
void but voidable and holds good, unless within three years after theminor attaining majority a Court of law sets aside that contract. Theargument, therefore, that Leonard entered into subsequent transactionswhich "impliedlycancelledthe mortgage bond isnot sound. Inthe
absence of a cancellation of the mortgage bond by the Court withinthe period already mentioned, the mortgage bond must be held to havebeen ratified and binding.
In the mortgage bond ' action brought by Snppramaniam Chetty,Annie, the subsequentpurchaser,wasnot madea party,and,therefore,
her title was not affected by the mortgage decree.
But it wasargued thatthetransferbyDavidto Leonard wasin
trust, and that Annie, who derived title from Leonard, get no bettertitle than him, and that the notice to David in the mortgage actionwas sufficient.I am not, however, satisfied aboutthealleged trust.
It was also urged that notice toDavidwasequivalent tonoticetohis
wife Annin. Thisargument also fails.It was alsourgedthatAnnie
lost her title by estoppel, shehavingbyherconductmadethe first
defendantbelieve thatthe mortgagebond and the decreeandthesale
under it were valid.I am satisfiedthattheevidencegivenby first
defendantthat David,Leonard, andAnnie, all of them,cametohim
and endeavouredto stop the saleunderthedecree,&c., is true.Iam
also satisfied that what Mr. Kurera, the auctioneer,says istrue, namely,
that atthe time of thefirst sale under themortgagedeed Davidwas
actually present; thatsale tookplacenearthehouse in which Annie
was living.He saysthat some ladies were presentatthe sale.But
he is not ableto say whether Annie was presentornot.The first sale
under the decreewas not completed.There was another,saleafter
that, at whichDavid wasnotpresentapparently.There, too,certain
ladies werepresent.Mr. Kurera’s evidence doesnotestablishan
estoppel aseffectuallyas the evidence of the firstdefendant. Butit
is to be noted that, according to the contesting defendants, Leonardand David had nottitle whatever to anyshare of theentireland, and
the seven/thirty-secondwhich Mr. Kurera proceededtosell belonged
to Annie. Therefore, if Annie was present in her house and did notprotest against the sale, her conduct gave rise to an estoppel.
Thereis no conclusiveproof, however, thatshe waspresent inher
house onthe occasionof 'either sale.But the conduct ofDavidonthe
occasion of thesale corroborates the evidence ofthefirstdefendant as
to his wife Anniehaving asked him tostop the sale,booForit is
obvions that David was satisfied that the mortgage' bond, the mortgage
decree', and thesale underit were all valid. Otherwise hewouldhave
protested at the sale. If he was satisfied as stated, it follows that hiswife Annie must have been of the same opinion. It is, therefore, pro-bable she interfered as stated by first defendant. Then first defendant'sevidence is also corroborated by the fact that Annie and David mort-gaged only twenty-five/thirty-second of Z 2. It is said that theymortgaged onlythat share,because the creditor, a Chetty,noticedthe
encumbrancer inrespect ofseven/thirty-second share. But Iwouldhave
expected better evidence than ' that called to prove this explanation. The-Chetty himself might have been called. On the whole, the conclusionis irresistible that Annie or David never for a moment thought thatthe mortgage of seven/thirty-second share and the decree on thatmortgage bond were of no value. They were not aware that therewas a flaw by reason of the omission to notice Annie.
I hold that the first defendant is entitled to seven/thirty-second share.The costs of this trial of the first defendant should be paid by thefourth and fifth defendants. '
The rest of the trial is postponed for to-morrow.
/
H. V. Perera /(with him Candkeratne), for the appellants.—Thefourth defendant’s conduct in requesting tire first defendant to takean assignment of the mortgage decree creates no estoppel againsther. Her conduct does not amount to a representation that shehad 'no interest in the property adverse to that of the mortgagee.The first defendant himself says that he was. asked to take anassignment of the decree in order that the judgment-debtor, thefourth defendant’s brother, may be given an opportunity of payingoff the mortgage debt. In the circumstances, the fourth defendant’sconduct amounts to nothing more than a representation that therewas a mortgage decree capable of execution at the decree-holder’spleasure. Where the question is whether a person’s conduct givesrise to an estoppel, it is not legitimate to give such conduct a largermeaning than that which must necessarily be given to it.
Even if the fourth defendant’s conduct amounts to a representa-tion that she had no interest in the property, the representationwas made with the intention that the first defendant should acton it in a particular way, namely, by, taking an assignment of thedecree. It was not made with the intention that the first defendantshould buy the property at the execution sale or from the executionpurchaser, the transaction by which the first defendant acquiredthe interest he is now setting up was not even in contemplation atthe time when the representation was made. The first defendantwas in no way prejudiced by acting in the way .in which the fourthdefendant intended him to act, that is, by taking an assignment ofthe decree; he subsequently assigned the decree to Baman Chetty,and had nothing more to do with it. It is true that in buying theproperty from the execution purchaser he acted to his prejudice,but as he was not intended to act in this way when the representa-tion was made, he cannot now rely on the representation, and setup a plea of estoppel against the fourth defendant.
( 863 )
The purchaser at the execution sale does not say that he wasmisled by anything said or done by the fourth defendant. Noestoppel, therefore, arises with reference to the execution sale.
Counsel cited Carr v. The London and North-Western RailwayCompany;1 Oillmen, Spence & Co. v. Carbutt & Co.;2 Swan v.North British Australasian Co., Ltd.;2 Abdulla v. AmeresekaraA
A. St. V. Jayawardene- (with him Samarawickrema and Croos-Dabrera), for respondent.—The request of the fourth defendantmade to the first defendant to take an assignment of the decreeclearly amounted to a representation that the decree was bindingon her, and that she had no interest in the property mortgaged.By reason of such representation the first defendant acted to hisprejudice, and the fourth defendant Annie is estopped from nowquestioning his title. The first defendant was justified in makinguse of such representation even in a subsequent transaction, whateverthe intention of the fourth defendant may have been. The fourthdefendant’s oonduct was such that a reasonable man would believethat she intended to assert that she had no interest in the propertymortgaged. The word “ intentionally ” in section 115 of theEvidence Ordinance does not mean that the person whose acts ordeclarations induced another to act in a particular way must havebeen under no mistake himself, or must have acted with an intentionto mislead or deceive. The principle is if a person by a represen-tation made or by conduct amounting to a representation hasinduced another to act as he would not otherwise have done, theperson who made the representation should not be allowed to denyor repudiate the effect of his former statement to the loss and injuryof the person who effected it.
If the representation made by the fourth defendant was onesuggesting an absence of adverse interest, and the first defendantacted on it and took an assignment of the decree, she is estopped asagainst him. Any purchaser on a sale on such decree is entitled toavail himself of such estoppel.
The fourth defendant’s husband having been made a. party tothe mortgage action, she is bound by the decree. Notice to thehusband is notice to her, and she having failed to intervene, she isbound by the decree under section 644 of the Civil Procedure Code.
Counsel cited Ounasekera v. Dissanayake;5 Sarat Chunder v.Gopal Chunder;6 Banda v. Patterson,r
1920.
Rodrigo v.Karvnaratna
Cut. adv. vult.
1 (1875) 31 L. T. R. 78S ; 10 Com. PI. 307. * 11914) 2 B. N. O. SO.
> 61 L. T. R. 281, 0. A.1 (1912) 16 N. L. R. 123.
a (1862) 7 H. &N. 603.• (1892) 20 Cal. 296.
» (1919) 21 N. L. R. 134.
( 864 )
im
Rodrigo v.Karunaratna
February 4, 1920. Bertram C.J.—
This case raises a question; of importance with regard to the lawof estoppel. The material facts are briefly these. In 1910 thefamily to whom this land belonged had occasion to raise some money,and Leonard, one of the members of the family, executed a mortgagein favour of one Suppramaniam Chetty for his share of the land,which was seven/thirty-seconds, of the whole. Subsequently to this-mortgage, by a family arrangement, which need not be particularlydescribed, Annie, a sister of Leonard, under a deed of exchange,received a transfer of a portion of the land of which Leonard hadmortgaged his share. This transfer to Annie being subsequentto the mortgage was subject to the mortgage. Ultimately themortgage bond was put in suit and the land was sold. Annie,however, was never made a party to the action. The case does notcome within the provisions of sections 643 and 644 of the Civil Proce-dure Code, inasmuch as the mortgage never registered his mortgagein accordance with the provisions of the Code. The decree, therefore,did not bind the interest which Annie had obtained by the deed ofexchange. This question arises in a partition suit. A purchaserfrom Annie sets up a claim to the land which Annie obtainedunder the deed of exchange. The matter for decision in this actionis whether, in fact, Annie and the purchaser claiming through herare estopped by the previous conduct of Annie in regard to 'thematter.
Now let us ask, what is the conduct which is relied on as workingan estoppel. There is no question that Annie knew all about themortgage.Itwas a family transaction, of whichshewould naturally
be cognizant,and when the mortgage bond wasputin suit, she, in
common no doubt with the. other members of the family, wasconcernedasto the possible result. She andherhusband David
appear tohave approached the first defendantandpersuaded him
to take a transfer of the decree, with a view to securing them timeto pay off the mortgage debt. The first defendant took thatcourse. Annie and David did not act upon the opportunity thussecured to them, and he accordingly assigned his decree to qneRaman Chetty.
Now it is said that the action of Annie, in invoking the aid of thefirst defendant, amounted to a representation to him that she atany rate had no interest in the land which she could set up adverselyto the mortgagee, or to any person purchasing under the sale. Thisseems to me a very legitimate proposition. I have very little doubtthat her action would naturally suggest this fact to the mind ofthe first defendant. But, as I have said, the first defendant freedhimself from responsibility with regard to the property by assigninghis decree. He afterwards appears to have continued to carry awaythe original impression that. Annie had no interest in the land.Subsequently the Fiscal’s sale took place. In the first instance,
there was an abortive Bale. The land was sold to a stranger, butthe sale did not prove effective. There is nothing to show thatAnnie knew anything of this sale, but- her husband David is saidto have been present. Ultimately a formal sale took place, andthe land was bought by Baman Chetty, but subsequently sold tothe first defendant. The first defendant says: “ I should never havebought this land from Baman Chetty but for the impression youproduced upon my mind at the time, when, at your request, I tookan assignment of the decree. You, therefore, are now estoppedas against me from saying that you have an interest in the land.”That is the question which we have to determine.
Now, the interpretation of this question depends upon section 115of the Evidence Ordinance, and that section has been submittedto a very careful and close judicial consideration. The word whichcauses a difficulty is the word “ intentionally.” The section says“ when one person has by his declaration, act, or omission inten-tionally caused or permitted another person to believe a thing tobe true and to act upon such belief.”
Now, it has been determined by a series of decisions that theapparent meaning of the word “intentionally” is not its realmeaning. We, I think, are bound by these decisions. There arepassages in the English authorities which would appear at firstsight to suggest that our Ordinance deliberately departed from theEnglish law. For example, the rule is thus stated by Bramwell B.in Cornish v. Abingion1: “ The ruje is that if a man so conductshimself, whether intentionally or not, that a reasonable personwould infer that a certain state of things exists and acts on thatinference, he shall be afterwards estopped from denying it.”
It appears, however, that when our own Ordinance used theword “ intentionally,” and when Bramwell B. said “ whether in-tentionally or not,” they both, though apparently at variance,meant the same thing. The gist of these decisions is that it doesnot matter whether a person knows the truth about the facts whichhe by his statement or his conduct misrepresents. Whether heknows the truth or not, if he speaks or acts in such a way as tocreate an impression, he must take the consequences of the impres-sion he so creates.
But that is with regard to the first step in the creation of an estop-pel. There is another step which remains to be considered. The firststep is the creation of the impression. The next step is the actionupon the impression. The Ordinance says that a man in order tobe bound by an estoppel must intentionally cause or permit anotherperson to act upon his belief. Now, in regard' to that, I cannothelp feeling that the principle of the English law is clear. The actiontaken upon the belief must be directly connected with the falseimpression' caused by the representation or conduct. Put it in
i (1859) 4 B. AN. 549.
( 866 )
another way. The representation or the conduot producing theimpression must be, in effect, an invitation to the person affectedby it to do a particular act. In other words, it must be shownthat the person against whom the estoppel is asserted actually con-templated the thing to be donev or at least that he ought reasonablyto be treated as having contemplated it. He must be consciousthat it is impending, or the circumstances must be such that heought reasonably to be treated as conscious that it is impending.It does not do to say that at one period in the history of the parti-cular matter an impression was produced, and that then at somesubsequent time the person on whom the impression was produceddid a thing on the faith of the impression, a thing which could nothave been to the contemplation of the person who originally createdthe representation. It seems to me that it must be shown thatthe person sought to be made responsible was conscious or oughtreasonably to be treated as conscious of what the other was aboutto do. What are the English authorities for that proposition?
The law of estoppel was at one time carefully formulated by avery eminent English Judge, Lord Esher, then Brett J., in thecase o'! Carr v, The London and North-Western Railway Company.1That learned Judge there drafted a series of four propositions, andthe third of these propositions is as follows: “Another propositionis that, if a man, whatever his real meaning may be, so conducts. himself that a reasonable man would take his conduct to mean acertain representation of facts, and that it was a true representation,and that the latter was intended to act upon it in a particular way,and he, with such belief, does act in that way to his damage, thefirst is estopped from denying that the facts were as so represented.”
Now, if that is a correct proposition, in order to succeed in thiscase, the first defendant must show that the action of Annie wassuch that any reasonable man would take her conduct to meanthat she had no interest in the properly, and that he was intendedto act upon it in a particular way, that is to say, by a purchase ofthe property. But at the time when that representation byconduct was made, there is nothing whatever to show that anypurchase by the first defendant was in contemplation.
Now, is that a correct statement of the law according to the otherauthorities? Those propositions were considered by Lord Esherin a subsequent case (Seton, Laing & Co. v. Lafone a), and he theresaid: “ Before framing the propositions in Carr v. The London andNorth-Western Railway Company,1 I had referred, I think, to nearlyall the cases on the subject, and sought to derive from them thedifferent propositions relating to the law o| estoppel.” He thereshows the origin of the particular proposition there under considera-tion. He draws attention to the fact that it appeared to be suggestedby the defendant’s counsel that the proposition was inaccurate,1 (1875) 10 Oom. PI. 807.1S87) 19 Q. B. D. 68.
1980.
Bertram
C.J.
Bodrigov.
Karunaratna
1980.
( 367 )
but he said with regard to that proposition: “ It has, therefore,been twice recognized in a Court of Appeal, and I think we musttake it to be a correct proposition of law.” –
It is dear, therefore, that these propositions of Lord Esher werenot only carefully considered, but have been treated as authoritative.There are also expressions in some of the other oases to which I mayrefer. In Swan v. The North British Australasian Company, Ltd.,1Cockbum C.J. makes these observations: ”^To bring a case withinthe principle established by the decisions in Pickard v. Sears andFreeman v. Cooke, it is, in my opinion, essentially necessary that therepresentation or conduct complained of, whether active or passivein its character, should have been intended to bring about the resultwhereby loss has arisen to the other party, or his position hasbeen altered.” Further, in the same case, Blackburn J'. speaks asfollows with reference to a judgment of Parke B.: “In the consideredjudgment of the Court, Parke B. lays down very carefully whatare the limits- He says that to make an estoppel it is essential,if not that the party represents that to be true which he knows to beuntrue, at least, that he mews his representation to be acted upon,and that it is acted upon accordingly."
Now, these seem to be the principles of the English law, andwhatever may be the effect of the decisions of the Courts of thisColony and of India and of the Privy Council upon the meaning ofsection 115, they certainly lay down this, that the object of thesection was to enact legal principles which were to be identical withthose in force in England. I .take it, therefore, that this sectionmust be interpreted in accordance with the principles of the Englishlaw to which I have just referred. Our only difficulty in so inter*preting it proceeds upon a decision of this Court in the case ofGunasekera v. Dissanayake.* It there appeared that the conductrelied upon as producing an estopped was conduct by a widow, whothroughout a series of dealings with the estate had acted on thesupposition that she was only entitled to One-seventh share on thesame footing as her children, and that she had no special rightsby virtue of the fact that she was married in community. Itappears that the plaintiff in that action had purchased at an executionthe one-seventh share of one of the children, and it appears to havebeen thought that he would not have purchased that share but forthe impression produced by the conduct of the widow to which I havereferred. LasceUes C.J. in that case said: “ It cannot be disputedthat here the conduct of the first defendant and the other contest-ing defendants in their dealings with the estate generally, andespecially in their dealings with the plaintiff’s wife and the plaintiffhimself, was the proximate cause of the plaintiff purchasing on thefooting that the first defendant had renounced her widow’s sharein her husband’s estate.”
Bbbtbam
O.J.
Rodrigo v.Kanma/ratna
1 (1862) 7E. AN. 80S.
• (1312) 16 N. L. R. 123.
( 866 )
1920.
Bertram
C.J.
Rodrigo v.Kanmaratna
That observation appears at first sight to suggest that, in oon-1sidering whether a person -is estopped with regard to a.particulartransaction, it is legitimate to consider the dealings of that persongenerally with the matter in question in the past. I am by nomeans sure, however, that this is what the Chief Justice reallymeant. We have not the full facts of the case before us. It mayvery well be that the widow knew of the intention of the plaintiffto purchase the one-seventh share at the Fiscal’s sale; that she wasconscious that it was impending; and that she tdok no action tooorrect his false impression. At any rate, I do not think that thejudgment can necessarily be read as laying down any general legalproposition. It must be taken, I think, as the view expressed uponthe facts of that particular ca^e, which were considered to be distinctfrom the facts in the authorities cited before the Court. Nor doI think that the observations of Pereira J., to the effect that theword “ intentionally ” must be interpreted in the manner he thereindicates, are necessarily inconsistent with the principles of theEnglish law. He says that the result of the authorities is thatintention to have a representation acted upon may be presumableas well as actual. That is perfectly consistent with the propositionof Lord Esher in Carr v. The London and North-Western RailwayCompanythat it must be shown that the person acting upon therepresentation reasonably supposed that he was intended to actupon it in a particular way.
Mr. Jayawardene has raised a further point, and that is, thaton the facts Annie must be taken to be constructively a party tothe mortgage action, and would, therefore, be bound by the decree.I do not think that that point is sound, but, I leave the law on thatpoint to be stated by my brother De Sampayo.
For these reasons, I am of opinion that the appeal should beallowed, with costs.
De Sampayo J.—
I agree. With regard to the second point taken by. Mr. Jayawar-deue, I do not think it is supported by any authority. Under theBoman-Dutch law, a puisne encumbrancer or person in possessionof the mortgaged property must be a party to the mortgage actionso as to be bound by the decree. The Civil Procedure Code providesfor registration of addresses, and in a case where a puisne encum-brancer has so registered his address, the mortgagee, when he bringsthe mortgage action, need only give him notice of the action. In myopinion the decree in the mortgage action in question did not bindAnnie under either system of law. Mr. Jayawardene, however,contends that Annie was virtually a party to the mortgage actionbecause her husband David was. But David was joined in the
1 (1875) 10 Com. PL 307.
( 869 )
action not as representing Annie, but in bis capacity as suretyon the bond. Moreover, I do not think that, even if the mortgageepurported to join David in the action as husband of Annie, therequirement of the Boman-Dutch law would have been satisfied.Mr. Jayawardene next contends that Annie had sufficient noticeof the action as provided by the Civil Procedure Code, and relieson Rowel v. Jayawardene, 1 in which neither party had registered anaddress, but the mortgagee had given full notice of the action tothe puisne encumbrancer, and it was held that the puisne encum-brancer was bound by the decree. That decision, however, is noauthority in this case, because no notice whatever was given toAnnie. What Mr. Jayawardene means is that her husband Davidhaving been a party to the action, she must necessarily have cometo know of the pendency of the action. But personal knowledgeof this kind, even if the inference of such knowledge under thecircumstances is sound, is not the same thing as a notice to be givenby the mortgagee in pursuance of the requirements of the law.
In my opinion Mr. Jayawardene’s contention cannot be sustained.
Appeal allowed.
1930.
Ds SampavoJ.
Rodrigo, eKarunaratna