Patel v Badal [1943] FJLawRp 20; [1875-1946] 3 FLR 322 (10 April 1943)

[1943] 3 FLR 322

SUPREME COURT OF FIJI

v.

BADAL & OR.

[Civil Jurisdiction (Corie C.J.) 10 April 1943

Deed of assignment oent of crop lien and collateral mortgage - voluntary assignment - deed executed "as executor" - whether a validassignment - second crop lien subsequently executed in substitution for that assigned - whether court will order substituted crop lien to be delivered to transferee of original crop lien - position between mortgagor and equitable assignee of mortgage.

In 1936 the defendant Badal executed a crop lien and collateral mortgage in favour of one Motibhai. Motibhai died in 1928 and his will was proved by P. Patel, the second defendant, as executor and sole beneficiary.

In 1939 P. Patel executed a voluntary assignment of certain debts and securities, including the mortgage and crop lien, to A. D. Patel, the Plaintiff, in trust for the use and benefit of Dahi, the mother of the deceased Motibhai. At that time the mortgage and crop lien were already in the possession of A.D. Patel and they remained in his custody. No registerable transfer of the mortgage was executed. At the date of the assignment, probate of Motibhai's will had not been registered at the Land Registry.

In 1940 the crop lien expired and a fresh one was executed by Badal in favour of P. Patel but was not assigned to A.D. Patel, nor was it delivered to him. A.D. Patel as trustee for Dahi claimed that the second crop lien was fraudulent and void or alternatively that it should be delivered to him; he also claimed in a separate action to recover from Badal the amount secured by the mortgage.

HELD. - (1) A deed of asent of t of a debt is executed by the executor and sole beneficiary of the deceased creditor " as executor" is as valid an assignment as though executed as beneficial owner.

(2) In Fiji, a conveyance as executor does not imply a more restricted convenant than a conveyance as beneficial owner.

(3) The Court will not order the lienee of a crop lien executed by the parties to an original crop lien to an assignee of the original lien but will restrain the lienee under the substituted crop lien) from disposing of the same otherwise than to the assignee of the original crop lien.

Cases referred to:

(1) &#16> [1879] UKLawRpCh 361; [1879] 14 Ch.D. 179; 49 L.J. Ch. 73; 8 Dig. 497; 40 Dig. 536.

(2) Rrick,s v. Tatham&#/i>&#/i> [1891]. 82.

ACTIOACTIONS TO RECOVER MONEYS secured by moe and for an i an injun to the lienee under a collateral crop lien. The actions were consolidated by agreement. Tnt. The facts are fully set out in the judgment

S.B. Patel for the Plaintiff
P. Rice for the Defendafendants.

CORRIE, C.J. reement between the pare parties the hearing of actions Nos. 73 of 1940 and 74 of 1940, which arise out of the same transaction, have been consolidated.

tion 74 of 1940 the plaintiff, A.D. Patel sued the defendanendants Badal and Punambhai Patel, claiming the sum of £324 19s 8d. During the hearing, the action was dismissed as against the defendant Punambhai Patel and continued against Badal atone.

In action No. 73 of 1940 the plaintiff, A.D. Patel, is suing the defendant Punambhai Patel alone.

The facts which give rise to these actions are as follows:-

On the 30th June 1936, the defendant Badal executed a Crop Lien in favour of one Motibhai, to secure the sum of £91 13s. 7d. and further advances and interest. The Crop Lien was registered under number 36/719.

On the 12th August 1936 the defendant Badal executed a mortgage in favour of the said Motibhai to secure the sum of £300 0s. 0d. and further advances and interest thereon. The mortgage, which was registered under number 13886, was expressed to be collateral with and to secure the same moneys as were secured by the Crop Lien dated 30th June, 1936.

Motibhai died on the 20^th Febr1938; and on the 27th July 1938, his will (in whech he is described as Motibhai Patel) was proved by the defendant Punambhai Patel, the executor and sole beneficiary therein named.

On the 31st May, 193e defendant Punambhai Pate! executed a deed whereby "as exes executor" he assigned to the plaintiff all and singular the debts, securities and moneys described in the schedule thereto, upon certain trusts for the use and benefit of Dahi, the mother of Motibhai Patel deceased.

The Schedule included-

"(5) Badal under Mortgage No. 13886 to Motibhai Patel (& C/L collateral) £285 14s. 8d."

Notice of the deed of assignment was served on the defendant Badal on the 21st June, 1939.

The mortgage and Crop Lien were in the possession of the plaintiff, at the time when the assignment was executed, and have remained in his possession ever since.

On the 21st June, 1939, the plaintiff lent the defendant Badal the sum of £6 0s. 0d.

On the 16th July, 1940, Crop Lien 36/719 having then expired, the defendant, Badal, executed a fresh Crop lien in favour of the defendant, Punambhai Patel, to secure £291 14s. 8d. By clause 13 of this Crop lien it was stated to be collateral with mortgage No. 13886.

The new Crop Lien was not handed over to the plaintiff and no assignment of it has been executed. No transfer of the mortgage for registration at the Land Registry has ever been executed.

In action 74 of 1940 the plaintiff now claims from the defendant Badal the sum of £324 19s. 8d. under the mortgage and the deed of assignment. In action No. 73 of 19140 the plaintiff claims against the defendant Punambhai Patel-

(1) An order that the Crop Lien dated 16th July 1940 be set aside as fraudulent and void; alternatively that the defendant transfer the Crop Lien to the plaintiff as trustee for Dahi

(3) An injunction to restrain the defendant from transferring, dealing with or disposing of the Crop Lien and the crops secured thereunder to any person other than the plaintiff as trustee for Dahi; and further restrain the defendant from collecting the proceeds of sugar cane secured under the Crop Lien and from collecting the debt from Badal.

On the evidence before the Court, the assignment by the defendant Punambhai Patel to the plaintiff was voluntary; and it is argued that as no transfer of the mortgage or of either of the Crop Liens was ever executed, there was no complete assignment of the debt, and the plaintiff cannot, by virtue merely of the deed of assignment, recover as against the defendant Badal.

At the time, however, when the deed of assignment was executed, the probate of the Will of Motibhai Patel deceased had not been registered at the Land Registry in accordance with s. 98 of the Land (Transfer & Registration) Ordinance 1933; and it follows that the executor was not at the time in a position to register a transfer of mortgage. As the mortgage and the Crop Lien had already been handed over to the plaintiff there was nothing further which the defendant Punambhai Patel could then do to complete the assignment of the debt.

Moreover, the assignment in the present case is by deed and the plaintiff is in that respect in a stronger position than the assignee in re King, Sewell v. King [1879] 14 Ch. D. 17, 8 Dig. 497. In that case a letter expressed to be a binding assignment upon trusts by way of voluntary settlement of six policies of life assurance, accompanied by deliverthe three policies which wech were in the assignor's possession, was held to be an a equitable assignment of all the policies, although the assignor expressed his intention of subsequently executing a deed to vest the policies in the assignee jointly with another person as trustee, and although three of the policies being in mortgage, were not handed over, and no notice of the assignment was given to the insurance office.

It has been argued that the defendant, Punambhai Patel did not do all that it was in his power to do to complete the assignment, in that he assigned as executor only and not as beneficial owner; and further that as executor he had no authority to make a voluntary assignment of any of the assets of the testator.

The law of this Colony, however does not contain provisions similar to those of the English Conveyance Acts¹, whereby the effect of a conveyance as executor is to imply a more restricted covenant than a conveyance as beneficial owner.

Punambhai Patel is the sole beneficiary under the will and he cannot now say that he had not full authority as executor to assign the debt.

On behalf of Badal it is further argued that he cannot be compelled to pay the plaintiff who is not in a position to have a discharge of the mortgage registered in the Land Registry.

In that respect, however, the plaintiff stands in the same position as any other equitable assignee. Upon payment of all moneys due thereunder, Badal will become entitled to have the instrument of mortgage handed over to him; he will also be entitled, in the event of the defendant Punambhai Patel refusing or failing to sign a form of discharge in accordance with s. 69² ofLand (Transfer & Regi Registration) Ordinance, 1933, to an Order under s. 181³ ofOrdinance, directing the the Registrar to register a discharge of the mortgage.

I hhat as against the defendanendant Badal the Plaintiff is entitled to judgment in action 74 of 1940 for £285 14s. 8d. and interest thereon. The sum of £6 0s. 0d. lent to the defendant, Badal, by the plaintiff appears to be a separate transaction as between Badal and the plaintiff personally, and must be so treated.

The Crop Lien dated 16th July 1940 is expressed to be collateral with the mortgage, and it must therefore be held to have been given in substitution for the original Crop Lien 36/719 of the 30th June, 1936. There is thus no ground for declaring it to be void: but, on the other hand, there does not appear to be authority for ordering that it be delivered to the plaintiff.

On the authority of re Pk, Bills v Tatham [1891h. 82, the defendant Pant Punambhai Patel will be a debtor to the plaintiff in respect of any sum he may receive under this Lien the Court will make an order restraining Punambhnambhai Patel from transferring, dealing wing with or disposing of the Crop Lien, or the proceeds of any crops secured thereunder, to or in favour of any person other than the plaintiff as trustee for Dahi.

ENDNOTES:

1 Vide Conveyancing and Law ofeProperty Act, 1881 44 and 45 Vict. c. 41, s. 7.

2. New Land (Transfer and Registration) Ordinance Cap. 120 s.Revised Edition tion Vol. II page 1236).

3.&#16 Land (fer andr and RegisRegistration) Ordinance Cap. 120 s. 182 (Revised Edition Vol. II page 1266).