SARAVANAMUTTU v. SOLAMUTTU

069-NLR-NLR-V-26-SARAVANAMUTTU-v.-SOLAMUTTU.pdf


( 885 )
Present: Bertram C.J. and Ennis J-
1924,
SARAYANAMUTTU v. SOLAMUTTU.
483:—D. C. Colombo, 7581.
Mortgage—Registration of lis pendens—Failure to register decree—.Sale
by mortgagor afterdecree—Purchasebymortgagee—Equitable
rights—Ordinance No. 14 of 1891, ss. 16 and 17.
A mortgagee registered his mortgage and his address, and oninstituting his action on the bond failed to register either lis pendensor the decree, and bought the land in execution of his decree.
After the decree, the mortgagor sold the land to the plaintiffwho registered his transfer.
Held, that a mortgage decree requires registration under section16 of the Land Registration Ordinance, and that, unless it is soregistered, it is void as against a purchaser for valuable considera-tion, who acquires title after judgment and before execution.
In the case of a mortgage action, the doctrine of lis pendensoperates after judgment and up to the conclusion of execution.
Where a person has bought subject to a registered mortgage, heought not to be allowed to eject the purchaser under the decree,except on terms of equitable compensation in respect of theextinction of the mortgage.
PPEAL from a judgment of the District Judge of Colombo.
Action for declaration of title to a land which belonged to oneAmeresekere, who, on August 1, 1919, mortgaged it to the defendant.The mortgage was registered on August 2, 1919, by the defendant,who also registered his address on August 28, 1919. On November15, 1921, the defendant put his bond in suit, but he did not registerhis lis pendens. He obtained a decree on November 21, 1921, whichwas not registered. On the sale in execution on March 3, 1922, thedefendant purchased the land and obtained a conveyance on March17, 1922, vhich was registered on Marsh 25. On December 12,
i.e., between the decree and the sale in execution, Ameresekeresold the land to the plaintiff, who registered his deed on January 27,
The learned District Judge found in favour of the defendant.
H. V. Perera (with him Weerasooria), for plaintiff, appellant.—Thedefendant is a purchaser at a sale in execution in a mortgage action.The lis pendens was not registered. Plaintiff purchased from themortgagor during the pendency of the action. Plaintiff’s deed isregistered prior to Fiscal’s transfer in favour of defendant. Section8 of Ordinance No. 29 of 1917 applies. Plaintiff gets a title freeof any rights arising through the mortgage action. The learnedDistrict Judge purported to follow Mohamadu Buhari v. Silva1
A
1 (1923) 24 -V. L. R. 477.
( 886 )
im
Sarcttxma-
mvUuv.
Solamutiu
rather than David v. Davith.* The decision in Mohamadu Buliari v.Silva {supra) does hot apply. Even if it does apply, it has been overruled by a Bench of five Judges in Anohamy v. Haniffa 2 which is-entirely in point.
Samarawickreme (with him Navaratnam), for defendant, re-spondent.—Sections 648 and 644 of the Code are capable of theconstruction that the registration of the mortgage bond and of theaddress is a sufficient compliance with the requirements of the law torender the mortgage decree binding, not only on a subsequent grantee,the conveyance to whom is prior to the institution of the action onthe bond, but also on a person who seeks to set up title to the propertyhypothecated on a conveyance from the mortgagor suubsequent tothe decree. Since a mortgage decree is purely declaratory and doesnot purport to create an interest affecting land, the registration ofthe plaint in a mortgage action is a superfluity. The matter inissue in a mortgage action is whether or not the propertyhypothecated is executable, in the event of the mortgagor’s failureto satisfy the mortgagee’s claim by payment. And,, it is the decreein, favour of the mortgagee that gives a good and valid title to apurchaser unde? the decree, as against the mortgagor and thoseclaiming under him. Once the mortgage decree is entered, theproperty hypothecated is in, custodm legia, till the decree is satisfied;and the mortgagor is precluded from dealing with the propertydeclared to be executable under the decree.. Any dealing with theproperty, subsequent to the decree, in contravention of the terms ofthe decree is nothing but an unlawful attempt to re-agitate thematter already decided in favour of fhe mortgagee. The plea ofres judicata must, therefore, be held to prevail against a title derivedfrom the mortgagor after the decree.
H. V. Perera in reply.—A mortgage decree requires registration(Adappa Chetty v. Babi3). The decree in the mortgage action inwhich defendant purchased was not registered. The principle ofres judicata does not apply. The legislature expressly says that thelis does not bind unless registered. The decree is a part of theproceedings. Equitable relief should not be granted to thedefendant. He has not claimed it in his answer. The defendanthimself was the mortgagee. His position is different from that- of astranger-purchaser.
August 25, 1924. Berth am C.J.—
This is one of those cases which so frequently come before ourCourts in which a mortgagee has to struggle with the difficultiescaused by the fact that he has not fulfilled the requirements of thelaw; In order fully to protect himself against all eventualities, the 1
1 (1922) 4 G. L. R. 43.2 {1923) 23 N. L. R. 239.
3 (1923) 23 X. L. R. 284.
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mortgagee has to register first of all his mortgage; secondly, hisaddress; thirdly, when he sues to enforce his mortgage, his actionas a lis pendens; fourthly his decree when he obtains it; andfinally, his Fiscal’s transfer. It is the business of those who advisehim to see that these things are done. If he fails to do any one ofthem, he has to depend upon the ingenuity of counsel to rescue himfrom what in this respect appears to be the inveterate negligence ofnotaries and proctors.
The facts of the case-are comparatively simple, and may be made.simpler still by the elimination of the fact, that the mortgagorgranted a lease to the present plaintiff before the action. It isagreed that this circumstance does not affect the issue of the appeal.The simple facts then are that after the mortgage decree themortgagor purported to convey the land mortgaged to the plaintiff,The mortgagee had registered his mortgage and his address, but-did not register either his Its pendens or bis mortgage decree, andthe question with which1 he is faced is^ how to escape theconsequences of his failure to do so. The mortgage decree was datedNovember 21, 1921. The plaintiff purchased the land about threeweeks later, that is to say, on December 12, 1921, and registeredhis deed on January 27, 1922. The property was sold on March 3,1922, the mortgagee himself being the purchaser, and his Fiscal'stransfer was dated March 17, 1922. The mortgagee by his answeralleges that “ the said J. H. E. Ameresekere (the mortgagor), in theerroneous belief that the title of a purchaser at the said executionsale-could be defeated by a private sale by him of the said property,as the said action hpd not been registered, has in collusion with theplaintiff executed the transfer pleaded by the plaintiff with thefraudulent object of defeating the title of the'purchaser at the saidsale. The plaintiff is merely a nominee of the said J. H. E. Amere-sekere (the mortgagor).’*
The case was tried on a preliminary point of law, namely, thequestion of .precedence between the plaintiff’s conveyance and thedefendant's Fiscal's transfer. The question whether or not thetransfer was a transfer for valuable consideration was not tried.It turns out that this question is vital to the case, and it will benecessary to remit the matter to the District. Court for Hie trial ofthis question of fact.
Mr. Samarawickreme, on behalf of the mortgagee, the respondent,raised a number of pleas, some of which have already been the.subject of a judicial decision. One of these pleas was that, if amortgagee registered hi3 address in pursuance of section 648 of theCivil Procedure Code, his judgment was under section 644 bindingagainst all subsequent grantees who had failed to register theiraddresses before action, even though they were not in existenceat the date of the action. It is not possible to consider this sugges-tion seriously. The main points on which he relied, however, were
1924.
Bertram
C.J.
Saravana*
muttu i
Sofamuttu
1*24,
Bertram
O. or.
Saravana-muUu v.&ofomuffe»
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two; firstly, that a mortgage decree does not require registration,as it is not a judgment affecting the land mortgaged; secondly,that the failure of his client to register his lis pendens does not matter,inasmuch as the contending transfer took place after judgment^and consequently he was protected by another and independent'principle, that of estoppel by res judicata.
He further contends that even if a mortgage does require registra-tion, yet, for the purpose of application of the principle of res judicata,such registratidn is immaterial.
Before we deal with'these contentions, it would be well to considerthe effect in this case of the failure of the mortgagee to register his.lie pendens. Mr. Samarawic^reme made the suggestion that theprinciple of lis pendens only applies up to the final decree, and afterfinal decree another principle was substituted, namely, estoppel byres judicata. It has already been held by this Court that, for thepurpose of the application of the principle of Its pendens t a mortgageaction is to be considered as pending up to the completion of execution.See Silva v. Fernando.1 It was suggested, however, that theauthorities were not fully considered in that case, and it would bewell to submit the question to further examination. It appearsto be undoubtedly the rule that in ordinary cases the principle oflis pendens extends only up to the final decree, and that after thedecree and before execution a lis pendem can no longer be said toexist. But this is where the decree disposes of all matters betweenthe parties, and nothing has to be worked out by further proceedings.With regard to mortgage actions, the leading textbook on * thesubject, Bennett on Lis Pendens, states the law as follows;—
** Although it is true, in a general sense, that the Us pendensceases with the rendition of judgment or entry of finaldecree, yet, in the case of a foreclosure of % mortgage onreal estate, it cannot be said that the lis pendem ceases uponthe making of the master’s deed after sale under the decree.Where something remains to be done by the Court in theexecution of its judgments and decrees, other than can bedone without order of Court by the mere ministerial officersof the Court, lis pendens continues until the decree isexecuted. So in the case of a mortgage, it continues untilthe purchaser has been put into possession of the property.”See Hukm Ghand’s Res judicata on page 697.
This has been expressly held to be the law in Indian Courts withregard to mortgage actions. See Shibjiram v. Woman* where the- authorities are collected and considered. See also Samil v. Babaji*“ In Shibjiram v. tVarnan (supra), the question propounded was: Doesthe execution proceedings in a case like the present revive or give
* (1920) 22 N. L. B. 29.2 (1897) 22 Bom. 939.
' (1904) 28 Bom. 361.
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**
continuance to the Us pendens % That question was stated to havebeen answered in the affirmative by a case, in the Privy Council.I do not think it matters whether tbe Us pendens is to be consideredas continuous, or only as having been revived by the executionproceedings. In either view of the matter, the principle of lispendens prevails just as it is deemed to prevail in the intervalbetween the final decree subject to appeal and the appeal. SeeH'ukm Chandt section 277; Caspersz’s -Modern Estoppel and Resjudicata, 3rd ed., p. 331. It must be taken, therefore, that, for thepurpose of this action, the principle of lis pendens extended afterdecree and up to the sale.
As I have said Mr. Samarawickreme’s two contentions were:first, that it is not necessary to register a mortgage decree; andsecondly, that inasmuch as the transfer he attacked took placeafter judgment, he is entitled to avail himself of an alternativeweapon, that of estoppel by res judicata, and that this is availableto him, notwithstanding tbe fact that his decree was not registered*
With regard to the first of these contentions it is an attemptto extend the decision of this Court in Mohamad Ali v. Weerasuriya,1which declared that a decree in an action claiming a declaration oftitle to land was not a decree affecting land within the meaning ofthe Land Begistration Ordinance. That decision, undoubtedly,established the principle that a decree cannot be said to affect theland, unless it invests a person with an interest in the land or imposesor creates some charge, interest, or liability which 'would operateprejudicially to the title of any subsequent purchaser. But I thinkthat on an examination of the subject it will become clear that amortgage decree does affect the land in this sense.
His second contention was that a judgment against a.mortgagor precludes both the mortgagor and anyone who claimedthrough him from setting up a title inconsistent with the effect ofthat judgment. It was urged in fact that the operative effect of ajudgment was binding on the person against whom it was pronouncedand his privies as res judicata.
I think we shall be in a better position to deal with both thesecontentions if we examine the history of the doctrine which we areaccustomed to refer to as that of lis pendens.
Strictly speaking, the terms which we have come to apply to thisdoctrine is a misnomer. The terms “ lis pendens* both in Bomanand Roman-Dutch law, had reference to quite a different subject.The law recognized an exceptio litis pendentis, but this- exceptionwas a plea that a suit was at the time actually proceeding in anotherCourt. This exception is discussed by Yoet in IV., 2, 7, and St and isreferred to by Hukm Chand in the opening paragraph of his chapteron Lis Pendens. The principle of Boman and Bomsm-Dutch lawwhich applies to the present case is a distinct and separate one,
1 {1914) 17 N. L. R. 417.
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fiBBTRAM
CJ.
Saravana-
muU
Selamuttu
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namely, the exc'eptio rei liUgioste. I cannot help thinking that the.authorities dealing with these two exceptions have, in some cases,been confused. See in particular the judgment in Per era v. Silva.1
Roman law absolutely prohibited the alienation of a res litigiosa.The subject will be found dealt with in special sections both of theDigest and of the Code. See Digest XLIV., 6 Cod., VIII., 30 (3?).The prohibition was of a very ancient date, and is referred to in aparticular form by Gaius in his treatise on the Twelve Tables,Digest XLIV., 6, 3, “ Rem de qua controversia est prohibemur inSoerum dedicate.” It was the subject of a special novel by Justinian,number CXIL, in which he reinforced the prohibition by specialpenalties.
In Roman-Dutch law the question arose whether this prohibitionrendered the alienation absolutely void, and it was held that it didnot. It was pointed out that it was a praetorian prohibition,inasmuch as* it was enforcible by an exception. The alienationwas not void, but voidable, and became void on the exception beingpleaded. See Sande de prohibita rei litigiosce alienatione, ch. IX..88. 2, 12. It was further pointed out by Voet that if every suchalienation was void, this would also apply to alienations made bythe victorious party, and that this was contrary to reason,Voet XLIV.t 6, I. The alienation was, therefore good, subject tothe right of the successful party to the suit to set it aside. Hencein Roman-Dutch law there followed the conclusion that res litigiosa:.might be freely alienated or transferred in any other manner, butalways subject to the right of the other party to the litigation.Salvo hire tertii. The decree against the party alienating could beexecuted against the possessor of the property without a new suit.See Voet, XLIV6, 3; Van Leeuwens Ccnsura Forensis, bk. II..1, 26, 16; Vander KesseVs Theses, DCXXX. All these authorsstates this principle in almost the same terms. See in particularVander Kessel:—
Res litigiosa nunc alicnari potest, sed Salvo iuve tertii litigantis,qui reportata Victoria, rem,' de qua litigavit, absque novoprocessu} a preesente possessore per executionem avocarepotest.
This is in fact exactly the English principle of Lis pendens which isembodied in the maxim, pendente Hie nihil inhovetur. and whichappears to have received statutory recognition as early as the reignof Edward I. (Hukm Chand, paragraph 269). In Ceylon we have longhad the habit of expressing this principle of our own law in thephraseology of the corresponding English doctrine. We havetreated the leading English case of Bellamy v. Sabine 2 as our ownleading authority so long ago as* 1887. We have treated the Englishauthorities as governing 6ur own law, and have recently consecratedthis state of affairs by legislation.'
1 {1910) 13 N. L. R. 81.*{1857) De G. and J. 578.
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I mention this development for this reason; that under theRoman-Dutch law a hypothecary action does not make the landres litigiosa, and the mortgagor was not restrained from alienatingit. See Sande, ibid, IX., 1, 4. The mortgagee had indeed otherspecial remedies, and his rights are specially dealt with in the novel ofJustinian just cited. De Sampayo J. considered this very questionin Muheeth v. Nadarajapillai,1 and with some reluctance came to theconclusion, that the principle of Us pendens does apply to mortgageactions. He does not appear to have realized that the question wasspecifically dealt with in Sande, and if he had done so, it is possiblethat he might have been of another opinion. The Opinion heexpressed was adopted by Wood Renton C.J., and subsilentio byShaw J., and is binding on ourselves. It seems clear from theauthorities cited in an earlier passage of this judgment that in placeswhere the English Common law prevails, the principle of lispendens is regarded as applicable to mortgage actions, and I thinkit should be taken that, with the phraseology of the English law,we have also adopted the sphere of its application.
The material question here, however, is: What is the basis of theprinciple which we administer? In our own law it originates in theprastorian prohibition against alienation of property which wasthe subject of a suit. On what ground does this prohibitionproceed? Hukm Chand, ibidt section 269, says: “ This is virtuallyanother extension of the doctrine of res judicata in. regard to persons,and was recognized even by the Romans among whom the res fromthe commencement of lis became litigiosa which neither of theparties could alienate; the subject in dispute after liti^ contestatiobecame litigious and passed into quasi judicial custody, and bothparties came under an obligation not to withdraw it from thedecision of the Judge.” Hukm Chand quotes as his authority forthis way of regarding the principle Lord Mackenzie's Roman law,but the passage cited does not appear to justify the citation. I havenot been able to discover in any Roman or Roman-Dutch text anyexpression of this view of the matter. But the same view has beentaken in the American Courts. See the case cited in Hukm Chandon page 691. The main purpose of the rule is to keep the subject-matter of the litigation within the power of the Court until thejudgment or decree shall be entered; otherwise, by successivealienations, its judgment or decree could be rendered abortive, andthus make it impossible for the Court to execute its judgment ordecree. If then, as we justly mayj we adopt this, as the explanationof the original prohibition, it applies equally to the modern principlewhich has been evolved from it. The principle of lis pendens meansthat from the commencement of the suit the subject becomeslitigiosa and passes into quasi judicial custody. That quasijudicial custody in the case of a mortgage action, we have seen,
1924.
Bertram
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Saravana-tnuttu v.SdamuUu
(1917) 19 AT. L. R. 4(i0.
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1924.
Bertram
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Saravana-
muttu v.SolamuUu
continues until the final execution of the mortgage decree. Wesometimes use the term custodia legis. This, in English law, refersto the custody by the Sheriff of goods delivered to him in execution.(See Stephen's Commentariest vol. Ill. on page 290), and has noreference to the subject we are discussing. But in the senseexplained by Hukm Chand the mortgaged land is in custodia legisfrom the institution of the suit until sale, and cannot be dealt withexcept subject to the determination and executive action of theCourt.
Th is being the position, it will become apparent that the subjectof res judicata is irrelevant to our present problem. The judgmenthas no special operative effect in the way of putting the propertyinto the custody of the Court. It is in the custody of the Courtfrom the institution of the action. Moreover, the principle ofestoppel by res judicata is not concerned with the operative effectsof judgments. That principle does not mean that the parties to ajudgment are bound by its operative effect, but that they are boundby the determination of the Court on all actual or implied issues offact and law, and may not raise them again. I have carefullyperused the textbooks dealing with this subject, and I cannot findthat it has at any time been regarded as having any other scope.That scope for the purpose of our own law is defined by the explana-tion to section 207 of the Civil Procedure Code. It is not possible,therefore, for a litigant who has disabled himself from using theweapon of lis pendens by failing to register his suit to make goodhis defect by having recourse to the alternative weapon of resjudicata. The position is thus clear for considering the effect of thefailure of tile plaintiff in a mortgage action to register Us pendensand his decree respectively. On the institution of lis pendens, themortgaged land becomes liable to be affected by the judgment,upon decree it becomes actually so affected. By the operation ofthe same principle, the order for sale is binding upon any subsequentpurchaser until the order has been finally carried out. It thusimposes a charge which prejudicially affects him. But for thisreason the law imposes a further condition upon the mortgagee.This charge does not become effective against a subsequentpurchaser who has duly registered. If it is not so registered, thepurchaser acquires an unaffected title which prevails against thesubsequent title of a person buying at the sale held in execution ofthe decree. The result is that, though the principle of lis pendensoperates up to final execution, its registration only protects themortgage up to decree; after decree he must further protect himselfby registering the decree. On the other hand, as I understand theposition, if the mortgagee neglects to 'register his lie, but doesregister his decree, then' he is sufficiently protected against allpurchasers acquiring an interest between the decree and itsexecution.
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I agree, however, with the proposition of my Brother Ennis thatwhen that Statute says no lis pendens shall bind a *' purchaser ’’unless and until the same shall be registered, it means by" purchaser ” a purchaser for value. It does not include a granteeon a voluntary conveyance. The term *' purchase ” has, it is true,a “ technical ” meaning in English law; a purchaser being a personwho obtains title by descent or devolution of law, but I do not thinkthe word in the English Act, from which our enactment is taken, wasused in this technical sense could be imputed to the word ‘'purchaser”used in our own Ordinance. The word ” purchaser ” in the Statuteof Elizabeth (27 Elis, C. 4t 8. 2) was interpreted as meaning apurchaser for money or other valuable consideration (Twyne's case,3 liep.y 83a). And I think it must receive a similar construction here.
The result, therefore, is that as against a person who is not apurchaser for valuable consideration, the principle of lis pendensstill operates notwithstanding any default in registration, and asagainst such a person the decree does affect the land. As againstsuch a person, moreover, it is not necessary to register. To sum up,therefore, I hold that—
In the case of a mortgage action, the doctrine of lis pendens
operates after judgment and .up to the conclusion ofexecution.
As against a purchaser for value acquiring title after judgment
but before execution, the doctrine of res judicata does notprotect a mortgagee who has failed to register his lis pendens.
A mortgage decree requires registration under section 16 of
the Land Registration Ordinance, No. 14 of 1891.
Unless it is so registered, it is void as against a purchaser for
valuable consideration, who obtains title after judgmentand before execution.
In any case it is clear that the plaintiff has bought subject to aduly registered mortgage, and he ought not to be allowed to ejectthe defendant except on terms of equitable compensation in respectof the extinction of that mortgage. This principle has been alreadyrecognized in two decisions of this Court (Kristnappa Cketty, v.Horatdla 1 and Anohamy v. Haniffa (supra)), but has.not so far beenworked out in detail.
I would, therefore, set aside the decree, and send the case back forfurther consideration. If it is found that the purchase was not forvaluable consideration, judgment should be entered for thedefendant. If, on the other hand, it should be found that thepurchase was a purchase of this nature, plaintiff should be declaredentitled to the land, subject to the payment of such compensationfor extinguishing the mortgage as the Court may determine onproper issues framed, or as the parties may agree.
I agree that the costs of the appeal should abide the result.
1 {1923) 26 X. L. R. 39.
Bertram
C.J.
Sarovana*muUu v.SolamuUu
( 394 )
1924. Emns J.—
Saravana- This was an action for a declaration of title to land and for the
MUttU Vm
SolamuUu recovery of possession.
The land in question belonged to one Ameresekere, who, onAugust 1, 1919, mortgaged the property to the defendant. Thedefendant duly registered his mortgage on August 2, 1919, andregistered his address on August 28, 1919. On August 5, 1921,Ameresekere leased the land for two years, and the lease wasregistered on May 8, 1922. On November 18, 1921, the defendantput his bond in suit on a warrant of,attorney to confess judgment.He did not make the lessee a party to the action, and did not registera lis pendens. He obtained a decree on November 21, 1921. Hedid not register the decree. On the sale in execution on March 8,1922, the defendant purchased the land and obtained a conveyanceon March 17, 1922, which was registered on March 25, 1922.
9
On December 12, 1921, i.e., between the decree and the sale in •execution in the defendant’s mortgage action, Ameresekere sold theland to the plaintiff, who registered his deed on January 27, 1922.
The case was heard on a preliminary issue of law, and the learnedJudge held in favour of the defendant.
On the appeal it was conceded that the plaintiff, as lessee underthe lease, was bound by the judgment in the action as he did notregister his lease before the institution of the action.
The plaintiff’s appeal was pressed on the ground that his d^ed„ofsale was executed and registered before the conveyance to the. defendant and so obtained priority under section 17 of theRegistration Ordinance, 1891.
The argument. in appeal resolved itself into a consideration ofthe various ways in which a mortgagee can protect his mortgageagainst subsequent grantees—
(1) Before the Institution of the Action.—By registering his mortgageand address he can deal with all subsequent grantees up to the dateof the institution of the action, by giving all those who have dulyregistered their deeds and addresses notice of the action. Then bysection 644, Civil Procedure Code:“Every person so noticed
.and every such grantee …. whose deed shall
not have been registered, or who shaU not have furnished suchaddress as aforesaid/’ are bound by the judgment in the action as ifthey had been made parties. It was argued that the true intent ofsections 648 and 644 of the Civil Procedure Code was to provide ameans by which every subsequent grantee would be bound by theaction. The words of section 644, by reference to sueh grantees andfurnishing an address as aforesaid, clearly limit the persons to bebound bv the action to those whose grants are executed before thedate of the institution of the action.
( m )After the Institution of the Action.—Purchasers whose deeds aredated after the institution of the action can be bound by the actiononly when, the Us pendens is registered (section 27 (a) 1 of theBegistration Ordinance, 1891, as amended by Ordinance No. 29 of1917). If a Us be not registered, a purchaser who has obtained thelegal title after the institution of the action is not bound by theaction.
After the Decree hi the Action.—Section 16 of the BegistrationOrdinance, 1891, provides inter alia that every judgment affectingland shall be registered.
And section 17 provides that: "'Every deed, judgment, order, orother instrument as aforesaid, unless so registered, shall be deemedvoid as against all parties claiming an adverse interest thereto onvaluable consideration, by virtue of any subsequent deed, judgment,…. whicli shall have been duly registered as aforesaid.
Provided, however, …. that nothing herein contained shalldeemed to give any greater effect or different construction to anydeed, judgment, order, or other instrument registered in pursuancehereof, save the priority hereby conferred on it.”
At this stage of the case it is to be observed that an issue wasraised as to whether the plaintiff was a bona fide purchaser forvaluable consideration. That issue has not yet been tried, butassuming that he was, it would seem that by his'prior registrationof his deed he obtained priority over the decree.
It was argued (1) that a decree in a mortgage action was not adocument affecting land and need not be registered, (2) that therewas no adverse interest, and (8) that the decree was res adjudicata.
On the first of these questions, I am of opinion that a mortgagedecree is a document affecting land.* The mortgage action is anaction “ to enforce a right of sale under a mortgage M (see section201, Civil Procedure Code.) On the decree.there is no seizure of theland, the land automatically passes into the custody of the Court,and the Court makes arrangements for the sale and subsequentconveyance to the purchaser. The decree in a mortgage action,therefore, in my opinion, operates to transmit the property to theCourt and enables the Court to grant a valid conveyance to thepurchaser. That a mortgage decree must be registered was held inthe cases^of Salman v. Gabo,1 Madan Lehhe v. Nagamma2 andAdappa Chetty v. Babi (supra).
On the second point, I am unable to see how the mortgage andgrant are adverse, because they can both exist concurrently. Themoment, however, that a decree is passed in the mortgage action, if,as I thipk, there is a transmission of the land by operation of lawto the Court, when the property is “ in custodia legis,” then there isan adverse interest, and the grant or the decree will stand or fall
1 1 Lesmbruggen's Rep. 27.3 (1902) 0 N. L. R. '21.
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SolarmtUu
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Enhib J.
Sarawana-muttu v.Solamuttu
with priority of registration. It has been held that the protectionafforded by registering a its pendens may extend to the subsequentconveyance by the Court.
On the third question, I am unable to see how any question ofres adjudicate can arise. If the decree be void for the purpose ofthe priority of the competing grant, there is no judgment to formthe basis of res adjudicate as applied by section 207 of the CivilProcedure Code.
Should it be found that the plaintiff is not a purchaser for valuableconsideration, then his grant obtains no priority by registration.What then is the position of the mortgagee on obtaining a decree?The decree is prior in date. Has such an unregistered decree anyforce to bind a grantee who has not given valuable considerationfor his grant? The object of the requirement of section 16 of theRegistration Ordinance, that judgments affecting land must beregistered, seems to be to afford notice to intending purchasers thatthe legal title has been affected by the decree.
The amended section 27a (1) says that no Us pendens shall binda “ purchaser/1 unless and until registered. The word “ purchaser Mseems to have the same meaning as the words “ party ” claimingon valuable consideration found in section 17. The amendedsection 27a (1), therefore would not apply to a grantee other thana purchaser, and such a person would be bound as formerly by thelist and the decree would be res adjudicate against him.
I would set aside the decree and send the case back for a findingof fact on the issue undecided. The costs of the appeal to abide theresult. If the plaintiff is a purchaser for value, he should be declaredentitled to the land, subject to the payment to the defendant of suchcompensation for extinguishing the mortgage as the Court maydetermine on proper issues framed, or as the parties may agree.If the plaintiff be not a purchaser for value, his claim should bedismissed.
Set aside and sent bach.