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ismail Allarakkhia Vs. Dattatraya R. Gandhi - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Judge
Reported inAIR1916Bom209; (1916)ILR40Bom638
Appellantismail Allarakkhia
RespondentDattatraya R. Gandhi
Excerpt:
.....by the mortgagor. 9. he now sues the defendant as transferor for return of the purchase money as on a total failure of..........c.j.1. under the will of louis mary valladares two of his three sons, namely, joseph francis and. louis mary, became entitled as tenants-in-common to equal moieties of the testator's house at mazagaon. the third son calisto was, by the will, given a right of residence in the house so long as he lived in harmony with his brothers and sisters.2. on the 13th of june 1914, calisto fraudulently representing himself to be his brother louis mary and. so entitled to an equal moiety in the house purported to mortgage such moiety in favour of abdul latif sumar.3. on the 10th of september 1914, calisto again fraudulently representing himself to be his brother louis mary purported to create a second mortgage of the said moiety in favour of the defendant, dattatraya r. gandhi.4. both the first and.....
Judgment:

Basil Scott, C.J.

1. Under the will of Louis Mary Valladares two of his three sons, namely, Joseph Francis and. Louis Mary, became entitled as tenants-in-common to equal moieties of the testator's house at Mazagaon. The third son Calisto was, by the will, given a right of residence in the house so long as he lived in harmony with his brothers and sisters.

2. On the 13th of June 1914, Calisto fraudulently representing himself to be his brother Louis Mary and. so entitled to an equal moiety in the house purported to mortgage such moiety in favour of Abdul Latif Sumar.

3. On the 10th of September 1914, Calisto again fraudulently representing himself to be his brother Louis Mary purported to create a second mortgage of the said moiety in favour of the defendant, Dattatraya R. Gandhi.

4. Both the first and second mortgages were registered as Calisto fraudulently represented himself to be Louis Mary before the Sub-Registrar.

5. On the 19th of July, Calisto again fraudulently representing himself to be the said Louis Mary purported, as Louis Mary, to join in a transfer executed on that date by the defendant to the plaintiff in consideration of the sum of Rs. 1,770. By the transfer Calisto personating Louis Mary purported to consent to the transfer for the sum of Rs. 1,770, agreed to be the amount owing to the defendant by the mortgagor under the second mortgage of the 10th September 1914, of the second mortgage debt and the full benefit of the covenants contained in the second mortgage and to the transfer of the moiety and all the estate, right, title and interest of the mortgagee and the mortgagor therein.

6. The mortgagee covenanted expressly that he had not incumbered. The covenants of which the transferee was expressed to get the benefit with the consent of the mortgagor included the mortgagor's covenant for title that he had power to transfer.

7. The intention of the transferee was clearly to have the settlement of the mortgage debt and the mortgagor's covenants for title in the second mortgage confirmed by the mortgagor. For this purpose the mortgagor was a necessary party. The transfer was, however, never executed by him but by a forger in his name.

8. The result was that the transferee had no recourse against the mortgagor after discovering that the second mortgage was a mere fictitious security.

9. He now sues the defendant as transferor for return of the purchase money as on a total failure of consideration.

10. The learned Judge being of opinion that the case could be disposed of on the authority of Clare v. Lamb I.L.R. (1875) C.P. 334 and Bree v. Holbech (1781) 2 Doug.654a applied the maxim 'caveat emptor' and dismissed the suit. 'We are unable to agree in the conclusion arrived at by the lower Court.

11. In Clare v. Lamb I.L.R. (1875) C.P. 334 at p.340 the Court recognized the correctness of the following statement of the law in Sugden's Vendors and Purchasers Page 549 (14th Edn.)' Although the purchaser has paid the money, yet if he is evicted before the conveyance is executed by all the necessary parties, he may recover the purchase-money in an action for money had and received,' and in Dart on Vendors and Purchasers that--'Until the conveyance is executed by all necessary parties the vendor remains liable in respect of all defects of title. He must, for instance, refund the purchase money if the purchaser having paid it, even although having taken possession, be evicted by an adverse claimant.'

12. In Johnson v. Johnson (1802) 3 B. and P. 162 where a conveyance of property of a testator required execution by three trustees under the will and was only executed by two, the purchaser on eviction under a superior title for one of the parcels conveyed was held entitled to recover the purchase money in respect of that parcel.

13. In the case before us the supposed Louis Mary was rightly deemed a necessary party to the transfer and the deed was prepared upon that footing but the transfer was never executed by Louis Mary. The defendant cannot successfully rely upon the transfer till it has been executed as drawn. The purchaser cannot be made liable on the maxim of caveat emptor if the owner from whom he believed he was to get a confirmation both of the covenant for title and of the transfer of the mortgagor's estate in the premises never in fact joined in the transfer.

14. If the stage of complete execution by all necessary parties is not reached there is no reason for not applying the rule of the Indian Contract Act, Section 20, 'where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void.' Here both plaintiff and defendant believed that Louis Mary was agreeing to the amount due on the mortgage and confirming the covenants contained therein, and agreeing to the transfer of the mortgagor's estate in the mortgaged premises whereas in fact he was no party to the negotiations. The defendant is, therefore, under Section 65, bound to repay the transfer money.

15. It is unnecessary in the view we take to discuss the arguments addressed to us on the covenants for title implied under Section 55(2) of the Transfer of Property Act.

16. We set aside the decree dismissing the suit and pass a decree for the plaintiff for the sum claimed with interest and the cost of suit throughout.


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