1938 MarsdenLR 250
McElwaine (SS) CJ:
Two main points are raised on this appeal: first, that owing to an Originating Summons of 1932 between the predecessors in interest of the parties to this dispute being undisposed of, an order for sale under s. 149 of the Land Code cannot be made.
In my opinion a summons for an order for sale is not a suit within the meaning of s. 5 of the Civil Procedure Code.
The Legislature has provided that a chargee shall have certain rights in case of default of payment. These included distraining for rent and selling the land charged both proceedings requiring the intervention of the Court, but in neither case does the proceeding appear to be a suit.
The Court Order does not confer a right to the money due, it merely ensures that a right shall not be enforced without the leave of the Court. The question has already been settled in Chettiappa Chetty v. Raja Abdul Rashid, (1931- 2) FMSLR, 345.
The second point was that while the appellant and one Meyappa are the registered proprietors of this land, Meyappa is a mere nominee of the respondent.
This point becomes of importance because the appellant claims that of the $20,000 due on the original charge he has paid off $4,500, leaving the sum of $15,500 still due and the appellant's case is that while the land is security for this sum nevertheless the money was due by the two owners of the land in equal shares and that the appellant, having paid $4,500, now owes only $5,500 (which sum he has been ready and willing to pay and which has been pad into Court), the remaining $10,000 being due by Meyappa, the other registered owner who is a mere nominee of the respondent.
If this is so, the respondent is not only a chargee by assignment but is in reality also one of the chargors.
It appears from an affidavit of the respondent that on 13 July 1935 he purchased an undivided half share of the charged land and that on 23 September 1935 he transferred this undivided half share to Meyappa subject to the charge.
He does not say what, if any, consideration Meyappa gave for this transfer.
On the same day-23 September the original chargee assigned the charge to the respondent.
Keruppa Chettiar, attorney for the appellant, in an affidavit stated that the transfer by the respondent to Meyappa of the undivided half share was a sham transaction made with the intention of avoiding payment of the full sum of $10,000 for which the respondent and his half share would be liable under the charge.
This allegation is not denied.
If the statements to which I have referred are true, then the respondent is not only a chargee but is in the position of a joint chargor and between him and the appellant - the other joint chargor-an account should be taken to ascertain how much of the $4,500 which has been paid on account of the charge has been paid by or on behalf of the appellant or his predecessor in interest.
The case should be remitted to the Court below to try the following issues:
(1) Is Meyappa a nominee of or trustee for the Respondent?
(2) What portion of the mortgage money has been repaid by of on behalf of the owner of the appellant's undivided half share in the property?
The Order for sale and for payment of costs is set aside. On determination of the two issues the respondent may, if he is so advised, renew his application for an order for sale.
The appellant shall have his costs of the appeal. The costs in the Court below (including the costs in the proceedings from which this appeal is brought) will be in the discretion of the Judge to whom the case is remitted.
JUDGMENT
Aitken J:
The facts out of which this matter arises are set out clearly and concisely by the learned Judge in the Court below. It is therefore unnecessary for me to attempt any re-statement of them, and since none of the allegations contained in the Appellant's affidavit of 14 October 1937, have ever been contradicted or questioned in any way in these proceedings, I am of opinion that they must