Jayatilleke Et Al., V. Siriwardena Et Al.,

1954 Present: Gratiaen A.C.J. and Gunasekara J.

S. A. A. P. JAYATILLEKE et al, Appellants, and H. C. T. P. SIRIWARDENA et al., Respondents

S. C. 314-D. C. Gampaha, 604/5608

Co-owners-Mortgage of his undivided share by one co-owner-Amicable partition among the co-owners thereafter-Effect of it on the earlier mortgage-Equitable considerations involved-Rule against "unjust enrichment".

In Ceylon, the rights of a mortgagee, to whom a co-owner has hypothecated his undivided share of the common property, continue to attach exclusively to that share notwithstanding a subsequent " amicable partition" of the property into divided allotments. The mortgage does not automatically attach to any share of the divided allotment conveyed to the mortgagor which had not been previously covered by the bond.

A, B and C who were co-owners effected an " amicable partition " of the common property, implemented by cross-conveyances. The basis of the arrangement was that each should become the sole owner of an unencumbered divided allotment in exchange for his original undivided share in the larger land which each (apart from the implied warranty against eviction) expressly warranted to be unencumbered. In fact A had previously mortgaged his undivided 1/3 share in the common property to D, but fraudulently suppressed this from B and C.

Held, that, in an action by D to enforce his mortgage bond, D was entitled to a hypothecary decree in respect of the whole land to the extent of A's original interest therein which had been mortgaged. In the result, B and C received less than they had bargained to receive from A in the " amicable partition ".

By the acquiescence of all parties, however, the execution-purchaser (who became the owner of an undivided 1/3 share of the larger land) adopted the earlier " amicable partition " and went into occupation of A's divided allotment, leaving B and C in continued occupation of the other allotments ; and this mode of possession continued for approximately nine years.

Held, that the status quo could not be disturbed at the instance of A's heirs. The rule against " unjust enrichment " prevented them from now asserting title to the unencumbered 2/3 share of the divided allotment possessed by the execution-purchaser, because this relief could not be granted without causing prejudice to B and C whose interests in the other allotments A and A's heirs were under a contractual obligation to protect. The form of decree asked for by A's heirs would be " unjust " because it would indirectly have the effect of diverting the execution purchaser into occupation as a co-owner of the allotments conveyed to B and C which A had warranted to be free from encumbrances.

APPEAL from a judgment of the District Court, Gampaha.

H. V. Perera, Q.C., with G. T. Samarawickreme, for the 2nd and 3rd defendants appellants.

N. E. Weerasooria, Q.C., with D. S. L. P. Abeysekera, for the 1st defendant respondent.

S. Nadesan, with J. Senathirajah, for the plaintiffs respondents.

Cur. adv. vult,

February 17, 1954. GRATIAEN A.C.J.-

Thomas, Edwin and Alexander (the 2nd defendant) were until 12th February, 1928, co-owners in equal shares of Pinkumbura Estate 113 acres 0 roods and 4 perches in extent. They then agreed to partition the property into three allotments of equal value, and to enter into deeds of exchange whereby each of them should become the exclusive owner of one such allotment. Accordingly, Thomas obtained a conveyance P4 from Edwin and the 2nd defendant of their undivided shares in lot A (37 acres 2 roods and 28 perches in extent) in exchange for conveyances of his undivided interests in Lot B (39 acres 3 roods and 14 perches in extent) in favour of Edwin, and in Lot C (35 acres 2 roods and 11 perches in extent) in favour of the 2nd defendant. The scheme of partition is shown in the plan P1 filed of record.

The terms of the cross-convey

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