004-NLR-NLR-V-12-THE-CEYLON-LAND-AND-PRODUCE-CO.,-LTD-v.-MALCOLMSON.pdf

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1908. Present: The Hon. Sir Joseph T. Hutchinson, Chief Justice,December 83vand Mr. Justice Wood Renton.
THE CEYLON LAND AND PRODUCE CO., LTD.v. MALCOLMSON.
D. C., Kandy, 17,579.
Quia timet action—Execution of mortgage by third party—Decree on suchmortgage—“ Cause of action.”-
Where a person takes a mortgage of a land belonging to anotherfrom a third party and puts such mortgage in suit and obtainsdecree thereon, the true owner has a sufficient cause of actionagainst such person to maintain an action quia timet.
A
PPEAL by the defendant from a judgment of the DistrictJudge. The facts sufficiently appear in the judgment of
Wood Renton J.
Baum, for the defendant, appellant.
Van Langenberg (with him Wadsworth), for the plaintiffs,respondents.
Cur. adv. milt.
December 23, 1908. Wood Renton J.—
The material facts in this case are as follows. Francis MendisSeneviratne, the owner of the land in dispute, sold it to the respon-dents by deed No. 4,932, dated May 11, 1897. The respondentsregistered their title on June 7, 1897. On August 11, 1902, the landwas sold under a money decree against Francis Seneviratne andpurchased by Mr. Joseph Malcoinson, who duly obtained his Fiscal’stransfer, entered upon possession of, and improved, the land, andwas in possession of it at the date of the institution of the present,action. The appellant, Frederick Mendis Seneviratne, took amortgage of the land from Francis Seneviratne, who is his brother,on July 11, 1902, registered that mortgage on the same day, subse-quently put it in suit in D. C., Kandy, No. 16,074, and obtained amortgage deoree for the sale of the land as the property of hismortgagor. The appellant has taken no steps to enforce this decree.The question that we have to decide is whether, under the circum-stances above stated, tjie appellant has committed an actionablewrong against the respondents. The learned District Judge hasanswered this question in.the affirmative, holding that the acceptanceand registration of the mortgage by the appellant is a “ denial of a
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right ” belonging to, and “ the infliction of an affirmative injury ”1908.
upon, the respondents within the meaning of the definition of December 23.“ cause of action ” in section 5 of the Civil Procedure Code. Apart ^oodfrom authority, I should be of opinion that this view of the law is Rknton J.correot. As purchasers of the land in dispute the respondents havea legal “ right ” to dispose of it freely. An aot on the part of theappellant by which the exercise of that right is seriously challengedor fettered is both a “ denial ” of it and the “ infliction of an affirm-ative injury ” upon those in whom it is vested. In the present casethe appellant, in registering his mortgage from Francis Seneviratneand in obtaining a decree against Francis Seneviratne for the sale ofthe mortgaged property on the footing that he was its owner, placedon the respondents’ registered title a real blot, which would gravelyand immediately prejudice their power of dealing with the land.
Unless there are decisions that constrain us to hold the contrary, Ishould say that the circumstances of this case dearly create, infavour of the respondents, a “ cause of action ” against the appellantwithin the meaning of section 5 of the Civil Procedure Code. Thedefinition of ‘ ‘ cause of action ” given in that section does not appearin the Indian Code of Civil Procedure, and I have been unable tofind any decisions, either local or English, bearing on the inter-pretation of the words “ denial of a right ” and “ infliction of anaffirmative injury ” as part of a definition of “ cause of action.” Aswe are, therefore, bound by no contrary authority on the point, Iwould hold that the appellant has committed against the respondentsin this case an actionable wrong.
It only remains to consider the question whether the respondentshave had recourse to the appropriate remedy. In the absence ofany allegation of special damage, I do not think that- the presentaction could be maintained as one of slander of title. But I see noreason why it should not lie as an action quia timet. Mr. Bawa, inhis argument for the appellant, pressed us with the decisions in thecases of Fernando v. Silva,1 and, although not so strongly, De Silvav. Ondaatjer In Fernando v. Silva, A, the mortgagee, not inpossession, of certain property, obtained a decree against B, hismortgagor, for realization of his security, and, in execution of thisdecree, caused the property to be sold to a third person. C, claimingto be in possession as owner of a portion of the property sold,brought a suit against A and B for declaration of title, and-askingto be quieted in possession, but failed to show that he had been inany degree molested in the enjoyment of his property. It was heldby the Full Court (Phear C.J., Clarence J., and Dias J.) that A hadno cause of action. This case is clearly distinguishable from thepresent, inasmuch as Phear C. J. states as the grounds of bis decision
that C,the claimant, had given no evidence of title to the propertyin suit, and (2) that she had not attempted to show that she had1 (1878) 1 S. C. G. 27.> (1890) 18. C. B. 19.
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1908. been actually disturbed by the purchaser from A and B, on theDecember 23. footing of his purchase, in the enjoyment of the property that sheWood claimed. Li the present case the respondents have a registered title;
Renton j. j8 dear law now (c/., Medankara Terunnanse v. Dias1 and Raphaelv. Pedro2) that proof of physical ouster is not necessary to make suohan action as this maintainable, and the entry by the appellant of hismortgage on the register, coupled with his subsequent proceedings,with a view to have the mortgaged land sold as the property of themortgagor, does, in my opinion, constitute a “ disturbance ” of therespondents’ “ enjoyment ” of it. In De Silva v. Ondaatje (vbisupra) the first defendant sold to the second, third, fourth, fifth,sixth, seventh, and eighth defendants land, of which they and theplaintiff were joint owners. Burnside G.J. held that an actionqma timet by the plaintiff would not lie (1) against the first defend-ant, because “ the mere sale by one man of the lands or goods ofanother, without doing any act to disturb the physical possessionor title of the owner, gives the latter no cause of action,” or (2)against the second to eighth defendants, because being joint ownerswith the plaintiff, and as such seized per my et per tout, they wereentitled to the entire possession. “ It is nowhere alleged,” hislordship added, “ that the defendants had ejected the plaintiff orousted him, and their entire possession is quite consistent with theplaintiff’s possession in common with them.” Dias J agreed withBurnside C.J. as to the first defendant. Lawrie J. dissented,holding that a sufficient cause of action against him was disclosed byallegations that he claimed to be sole owner; that he denied theplaintiff’s right; and that he executed, delivered to the pur-chasers, and thereby enabled them to register, a notarial deedof sale of the whole land.” The raison d’etre of the decision of themajority of the Judges on this point is now disposed of by the caseswhich we have no power, and I for one have no inclination, toover-rule, in which it has been held that where the title to, and thepossession of, land are in dispute, failure to prove ouster is notfailure of the cause of action. But it will be observed that it is theposition of the second to eighth defendants in De Silva v. Ondaatjethat presents the real analogy to that of the appellant here. Viewedfrom that standpoint, De Silva v, Ondaatje is to some extent anauthority in favour of the respondents. For Dias J. and’Lawrie J.,differing from Burnside C.J., held that, as against the second toeighth defendants, the plaintiff was entitled to succeed; Dias J. onthe ground that these defendants were in actual possession of thewhole land, including the plaintiff’s share, and were denying theplaintiff’s right to any share of it; Lawrie J. on the ground of theregistration by the defendants of their deed of sale. “ The existenceof such a deed on the register,” said that learned Judge, in languagethat may fitly be applied to the present case, “ would necessarily1 (1886) 7 S. G. C. 145.* (1901) 2 Tambiah 73.
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prejudice the plaintiff. It would render his share in the land unsale- 1908-able and valueless, because no one would purchase from him or December 23-would lend money to him on that security until his title on the Woodregister was cleared.” Renton J.
It is indisputable that an action quia timet is maintainable inCeylon. Sir John Phear says so in Fernando v. Silva,1 and there aremany later decisions to the same effect (of., Atchy Kannu v. Nagam-ma 2 and Soysa v. Sanmugam3). In regard to the circumstances underwhich such actions are maintainable, the following passage ooours inthe judgment of Phear C.J. in Fernando v. Silva 4:—“ If nothing hasyet happened to prevent, or to interfere with, the plaintiff’s presentenjoyment of his property, where no cause has yet occurred torender it neoessary for him to have actual recourse to a Court ofJustdoe for remedy, yet it may sometimes be right that he should beafforded an opportunity of making de bene esse use of that evidenoewhich he has at hand to establish title against a person who onlythreatens and does not yet disturb it. It is, however, only in a case
of this kindthat a suit should be entertained quia timet, as
the old English phrase is.” I cannot think that in this passageSir John Phear could have meant to hold that under no othercircumstances would an action quia timet lie in Ceylon. The EnglishCourts, while defining carefully the facta probanda in actions ofthis character, have not limited the class of cases in which theremedy might be applied, for its existence has been recognizedas a means oif securing the delivery up of forged or fraudulentor invalid instruments, on which actions at law might be brought(Cooper v. Joel 3 and c/., Dingykamy v. Don Pedris * Soysa v.Sanmugam3), or of enabling a surety, after debt due, althoughnot sued (Wooldridge v. Norris’*), or against whom judgment hasbeen obtained, but who has paid nothing (Wolmershausen v. GfuMick 8),to call in the former case on the principal debtor to dischargethe debt, and in the latter on a co-surety to contribute towardsthe common liability, “ it being unreasonable that a man shouldalways have such a cloud hanging over him.” On the sameprinciple, a trustee, who has acquired liability as such, may, bythe action quia timet, obtain an order of indemnity against hiscestui que trust before being called upon to pay (Hobbs v. Wayet; 9 Inre Blundell10).
In addition to these instances of its use, the remedy by quiatimet action is open to persons who complain of a threatenednuisance (A.-O. v. Manchester, Corporation of ;u Fletcher v. Bealey;13
» (1878) 1 S. C. C. 27.
(1906) 9 N. L. R. 282.
8 (1907) 10 N. L. R. 355.1 (1878) 1 S. C. C. 28.
‘ (1859) 27 Beav. 313.
(1882) 5 S. C. C. 32.
(1868) L. R. 6 Eq. 410.
(1893) 2 Oh. 514.
> (1887) 36 Ch. D. 256,i» (1888) 40 Ch. D. 377.
» (1893) 2. Ch. 87.
78 (1884) 28 Ch. D. 688.
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1908-A.-G. v. Nottingham,, Corporation of 1). So far is the class of ease
December 23. indicated by Phear G. J. in Fernando v. Silva from being exhaustiveWooD of the scope of quia timet notions that in Brooking v. Maudslay, Son,Renton J. and Field2 it was held that the possibility of legal proceedings beingtaken on an instrument, after evidence whioh would show a defenceto them was lost, was not a ground for an action for cancellation ofthe instrument quia timet, but for an action to perpetuate testimony.Iii the case last cited,.Sir Eichard Webster, A.-G., in his argumentfor the defendants, included, among the grounds on which a quiatimet action would lie, the placing of “ a blot on the plaintiffs titleto property, which it was necessary to clear away.” I have beenunable to obtain access here to some of the older English text booksof practice, which might have supplied illustrations of this head ofrelief. But enough has been said to show the scope of the remedy inEngland; and, while insisting as firmly as the English Courts doon proof of the necessary ingredients of an action quia timet, weought not, I think, to assign to it a more restricted sphere in Ceylon,The necessary ingredients in an aotion quia timet are (a) actual orimminent injury; (b) prospective damage of a substantial, if not,irreparable kind (Fletcher v. Beaky „■* A.-G. v. Manchester, Corporationof;* A.-G. v. Nottingham, Corporation of5). In the present caseboth conditions are, in my opinion, fulfilled. The blot placed onthe respondents’ registered title is, I think, an actual, and it iscertainly an imminent, injury to them, and the prospective damagethat will result from it is, in any event, substantial. The realityof the respondents’ apprehensions on this point is demonstrated bythe fact that the appellant, when his registration of Francis Senevi-ratne’s mortgage to him was challenged in the respondents’plaint,promptly denied their title in his answer, and alleged that the landin dispute was liable to be sold in execution as the property of themortgagor. Mr. Bawa argued that we ought not, in decidingwhether or not the action will lie, to consider the attitude adoptedby the appellant in his answer, or defences that were made thesubject of distinct issues but withdrawn by the appellant’s counselat the trial. I agree. The question of law as to whether the plaintdiscloses a cause of action must be dealt with by itself. But indeciding on the substantiality of .the prospective damage appre-hended by the respondents, the ease with which the appellantutilized the registration of his mortgage as a starting point for adenial of their title is a circumstance of which we have, I think, aright to take account. If the owners of property had no immediateremedy in a case of this description, they would suffer substantialdamage in a double sense, in the depreciation of the value of theirproperty in the market and in the imminent risk of the manufacture
1 (1904) 1 Ch. 673.3 (1884) 28 Ch. D. 688.
3 (1888) 38 Ch. D. 636■3 (1893) 2 Ch. 87.
» (1904) 1 Ch.,673.
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of claims of counter title, which, with the lapse of time, it would bevery difficult, if not impossible, to meet.
I think that the decision of the learned District Judge is perfectly-right, and I would dismiss this appeal with oosts.
Hutchinson C. J.—
The plaintiffs have a good oause of action against the appellant.The appellant’s conduct has been a “ denial ” of the right whichthey claim, and has also inflicted on them an affirmative injury.1 think the appeal should be dismissed with oosts.
Appeal dismissed.
1908.
October 27.
WoodRenton J.