Ramanathan Chetty V. Cassim Et Al.

Present: Lascelles C.J. and Middleton J.   May.30,1911

RAMANATHAN CHETTY v. CASSIM et al.

102- D. C. Matara, 4,835.

Mortgage bond-Action by mortgagee-No notice to subsequent lessee- Subsequent action against lessee does not lie-Civil Procedure Code, ss. 643, 644-Merger.

A mortgagee who fails to give notice of his action on the mortgage bond to a subsequent lessee, who had duly registered his lease and address under section 644 of the Civil Procedure Code, cannot after sale of the mortgaged land under his decree bring an action against the lessee to have the lessee's interest in the land sold declared bound and executable for the balance of the debt.

A mortgage is, as a general rule, extinguished when the mortgagee, by purchase or otherwise, becomes the owner of the mortgaged property.

THE facts of this case are set out by Middleton J. as follows: -

In the present case the plaintiff, as mortgagee of certain property, got a mortgage decree against his mortgagors-the first five defendants-without citing the sixth, seventh, and eighth defendants, lessees of the land by deed of lease from the first five defendants

1 (1874) L. R. 9 C. P. 400.

dated subsequently to the mortgage. The ninth defendant was a sub-lessee of one-fourth from the sixth, seventh, and eighth defendants.

The land was sold in execution and bought by the plaintiff at the Fiscal's sale, who obtained a Fiscal's transfer. The sixth, seventh, and eighth defendants refused to give possession to the plaintiff. Later, the plaintiff, who had still some Rs. 10,000 to recover under his mortgage debt, sued all the lessees in this hypothecary action, making the mortgagors again defendants, claiming that the leasehold interest of the sixth to the ninth defendants should be declared bound and executable under his mortgage.

The sixth defendant only answered, and the District Judge gave judgment dismissing the plaintiff's action, holding apparently that there was a merger of plaintiff's mortgage bond in his former decree, and that the sixth defendant's interest under his lease was not executable under the mortgage bond, as the lessee was not joined in the hypothecary action, and his lease was prior in date and registration to the plaintiff's Fiscal's transfer.

The plaintiff appealed.

Sampayo, K.C., for the appellant.-The District Judge is wrong in holding that the mortgagee's and mortgagor's rights have become merged. What the plaintiff bought was the land minus the lease. The right of the plaintiff as mortgagee is, therefore, not merged altogether in his ownership of the land.

Lebbe v. Siddik1 relied on by the District Judge is no authority in this case; if the plaintiff had sued the lessee in ejectment, that case would apply. In the present action we seek to have the lessee's interest declared bound and executable. The plaintiff did not know of the existence of the lease till after the decree. The plaintiff was, therefore, unable to gather up all the interests in the first action.

A. St. V. Jayewardene, for the respondent.-The mortgagee is now the owner of the property. He cannot now get a hypothecary decree. [Middleton J.-Is the plaintiff barred by section 34, Civil Procedure Code ?] Yes; he should have included every claim in the first action.

The plaintiff had not complied with the provisions of sections 643 and 644 of the Civil Procedure Code; if he had, the lessee would have been bound to give him notice of his lease; and if the lessee did not, he would lose his rights.

The old hypothecary actions are no longer available under our law; the provisions of the Civil Procedure Code have to be followed. Counsel cited Punchi Kira v. Sangu2 Santiago v. Fernando3 Goonawardene v. Silva,4 and Bank of England v. Vagliano5.

1 (1906) 3 Bal 225.                                                         3 (1901) 2 Br. 126.

2 (1900) 4 N. L. R. 42.                                                    4 (1900) 1

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