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Motivahoo and anr. Vs. Vinayak Veerchand - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Judge
Reported in(1888)ILR12Bom1
AppellantMotivahoo and anr.
RespondentVinayak Veerchand
Excerpt:
vendor and purchaser - auction sale by mortgagee of mortgaged property--conditions of sale--condition that purchaser shall take such title as vendor can give where vendor has no title at all--construction--such condition, implies possession of some title in vendor. - - though i felt and still feel doubt as to the correctness of my original judgment, yet as all the points suggested by the learned second judge were present to my mind and considered by me before delivering it, i think the best course would be for me to adhere to it, and obtain the opinion of the high court on a reference which i should have been willing to make in the first instance had i been asked to do so. if the purchaser is bound by the condition to pay for whatever the vendor can give, i apprehend the principle is..........generally do make such claims without any grounds.' in other words, he bought, subject to the ninth condition of sale, a chance which he thought at the time to be a good one, but which turned out to be a bad one. it is not, therefore, in my opinion, strictly correct to say that the defendant purchased without any consideration whatever. i am unable to see that the fact, that no abstract of title was prepared before the sale for the inspection of intending purchasers, affects the question. the tenth condition does not provide for this, and it was not contended before me that the vendors were bound to follow such a course, which would certainly be an unusual one.4. 'on reconsideration, then, i adhere to my former opinion, that the plaintiff is entitled to recover, and that this rule.....
Judgment:

Hart, C.J.

1. 'I am unable to concur unreservedly. Though I felt and still feel doubt as to the correctness of my original judgment, yet as all the points suggested by the learned Second Judge were present to my mind and considered by me before delivering it, I think the best course would be for me to adhere to it, and obtain the opinion of the High Court on a reference which I should have been willing to make in the first instance had I been asked to do so.

2. 'The doubt which most pressed me was that which apparently most influenced the Second Judge in arriving at a contrary result, viz., that the reported cases in which the purchaser was held to his bargain seem to be cases in which what was sold was a defective title, whereas here it is no title. But this seems to me a question of degree only, not of principle. If the purchaser is bound by the condition to pay for whatever the vendor can give, I apprehend the principle is the same whether what can be given is all or a good deal or little or nothing. Stress is laid on the obiter dictum in Edwards v. Wickwar L.R., 1 Eq., 68 throwing doubt on Freme v. Wright Madd., 364. In spite of the great respect undoubtedly due to the opinion of the learned Judge enunciating that dictum, I am unable to attach great importance to it, not only because it was not necessary to the decision of the case before him, nor because he omits to specify any case or authority in which or by which the decision in Freme v. Wright was held to be 'a stretch of the jurisdiction of the Court,' but also because that decision is cited without disapproval as settled law in all the latest editions of all the best text-writers: see Davidson's Conveyancing (4th ed.); Dart's Vendors and Purchasers (5th ed.); and Fry's Specific Performance (2nd ed.). On the other hand, Hume v. Pocock 1 Ch., 379 is an authority for holding that a condition of sale may preclude a purchaser from showing that the vendor has no title, and is so cited in Seton on Decrees (4th ed.).

3. 'Another doubt that suggested itself to my mind was, whether the plaintiffs having notice, in general terms, of a claim by Nathibai were bound to postpone the sale for the purpose of sifting it. I can find no authority for saying a vendor is bound to investigate his own title. That is the duty of the purchaser. No doubt, if the vendors had sifted Nathibai's claim, and found the title was in her, and not in them, and had then misrepresented or suppressed the result of their investigation, as in Heywood v. Mallalieu L.R., 25 Ch. Div., 317 the sale would not be upheld. But they made no such investigation, and there is no reason for saying they ought to have made it, but did not, because they knew or suspected what the result would be. Probably they thought, as the purchaser admits he thought, that 'old women generally do make such claims without any grounds.' On the other band, they did give the purchaser all the information they had themselves, viz., that Nathibai 'claimed to be the absolute owner of the property.' He, however, chose to buy admittedly 'on his own judgment,' and because he thought old women generally do make such claims without any grounds.' In other words, he bought, subject to the ninth condition of sale, a chance which he thought at the time to be a good one, but which turned out to be a bad one. It is not, therefore, in my opinion, strictly correct to say that the defendant purchased without any consideration whatever. I am unable to see that the fact, that no abstract of title was prepared before the sale for the inspection of intending purchasers, affects the question. The tenth condition does not provide for this, and it was not contended before me that the vendors were bound to follow such a course, which would certainly be an unusual one.

4. 'On reconsideration, then, I adhere to my former opinion, that the plaintiff is entitled to recover, and that this rule ought to be discharged.'

5. It will be seen, from these judgments, that the point on which the Judges differ is not as to the meaning of the words in the ninth condition of sale.; but as to the effect which the Court ought to give to that condition.

6. The question, then, which we respectfully submit for, the opinion of their Lordships the Judges of the High Court is, whether the defendant purchasing under the said ninth condition of sale in the facts hereinbefore set forth is liable to pay to the plaintiffs the balance of purchase-money. If the answer be in the affirmative, the present decree for the plaintiffs will stand, and execution, which has been stayed pending this reference, will be ordered to issue thereon. If the answer be in the negative, the decree will be set aside, and the suit will be dismissed with costs to the defendant, to be paid by the plaintiffs, Us. 51; costs of the rule for a new trial, also Rs. 51, will abide the result of the reference.

7. No sum has been ordered to be deposited in this Court to cover the costs of the reference, as is usual, as this is not a reference sought by either of the parties, but is necessarily made by the Court on a difference of opinion between the Judges, under the provisions of Section 69 of the Small Cause Court Act.

8. No one appeared for the plaintiff.

9. Vicaji for the defendant: Although this suit is, in form, to recover a sum of money, it should rather be regarded as a suit for specific performance, to compel the defendant to complete the purchase. There is no provision in the Specific Relief Act and no decision in any Court in which a vendor, having neither title nor possession, has been given specific performance against the purchaser.

10. The ninth condition of sale implies that the vendors can give a positive title of some kind; but here neither the vendors nor their mortgagor can make out any title at all. In an unreported case of this Court, Byramji Jijibhai v. Parmanandas Jivandas, it was decided that a condition of sale similarly worded imported some title to be given by the vendor. That decision was based on the case of Seaton v. Mapp 2 Coll., 556, which showed that special conditions of sale, excluding the purchaser's ordinary right of obtaining a good title, ought to be strictly construed against the vendor and in favour of the purchaser. The cases cited in the Court below are distinguishable from the present, inasmuch as in every one of them the vendor had some title to give to the purchaser.

11. Assuming the ninth condition covered a case of no title on the part of the vendors, who acted at the auction-sale of the 18th of January, 1886, with the utmost good faith, there was a common mistake on the part of both parties to the sale. Both of them believed that there was some title to be made by the one and accepted by the other; and, according to Cooper v. Phipps 2 L.R.H.L. Cas., 149 and cases of that class cited by Pollock in his Principles of Contract (2nd ed.), p. 427, the purchaser must be relieved from the effects of that common mistake. It was also within the special knowledge of the vendors that their mortgagor had become insolvent in 1885, and they ought to have made mention of that circumstance in their conditions of sale, so as to have put intending purchasers on enquiry. In re Banister; Broad v. Munton L.R., 12 Ch. Div., 131 and In re Marsh and Earl Granville L.R., 24 Ch. Div., 15 and 17 show that the vendors are bound to disclose the whole of the truth within their knowledge.

Charles Sargent, C.J.

12. It must be taken as found, for the purposes of this reference, that the vendor had no title whatever, being a mortgagee under one Ramchandra Damodar, who had stolen the title-deeds from one Nathibai, the real owner of the property in question, who is now and always has been in possession. It has also been found that, just before the property was knocked down to the defendant, he was informed that Nathibai made a claim; but that he was not told, as the defendant contended he was, that there was nothing in her claim; and, lastly, that he was not told anything making the ninth condition misleading.

13. The question referred to us is, whether under these circumstances the defendant was bound to complete his contract of purchase having regard to the ninth condition of sale under which the property was advertised for sale, and which is in the following terms: 'The vendors shall not be bound to give any better title to the purchaser than they themselves possess, and the purchaser shall take the premises sold with such title only as the vendors can give him.' This present action is, in form, to recover the residue of the purchase-money, but it is virtually one to compel specific performance, and must be governed by the principles applicable to such a suit.

14. Apart from any special consideration arising from the information given to the defendant at the sale, the question for determination is whether, having regard to the ninth condition of sale, the Court should compel the purchaser to complete the purchase when the vendor has no title of any sort, and not even the possession to offer to the purchaser.

15. In Freme v. Wright 4 Madd, 364, where the property of a bankrupt was sold by the assignee under a similar condition, the purchaser was compelled to take such title as the bankrupt had. But all that appears in that case is that the bankrupt had not a 'good title.'

16. However, in Edwards v. Wickwar L.R., 1 Eq. 68 Vice-Chancellor Wood referring to Freme v.' Wright says that, notwithstanding the special circumstance, in that case, of the vendor being the assignee in bankruptcy,' it has been thought a stretch of jurisdiction of the Court to force the title on the purchaser.' It may doubtless be said that such a condition of sale gives the bidder notice that the vendor's title is a questionable one, and if he chooses to purchase with that knowledge, he might to be' kept to his bargain. But no purchaser reading that condition would suppose that the vendor had no claim of any sort or kind to the property, not even such prima-facie title as is evidenced by possession.

17. In Seaton v. Mapp 2 Coll., 556, 562 Vice-Chancellor Knight Bruce states in admirable language the principle on which conditions of sale are to be construed. He says: 'I think, and have always thought, that when a vendor sells property under, stipulations which are against common right, and place the purchaser in a position less advantageous than that in which he otherwise would be, it is incumbent on the vendor to express himself with reasonable clearness; if he uses expressions reasonably capable of misconstruction, if he uses ambiguous words, the purchaser may generally construe them in the manner most advantageous to himself.' Applying this principle to the present case, the purchaser is, in our opinion, entitled to say that the stipulation contained in the ninth condition implied that the vendors had some title, however defective it might be. As to the information the defendant received at the auction, it certainly gave him no notice to the contrary. The question referred to us must, therefore, be answered In the negative.

18. Plaintiffs in person.


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