Case No.:

PC-REV-83-1957 (Ed Darner)

Court:

Court of Appeal

Issue No.:

1962

Principles

·  Mortgage_PrescriptiOfl.P0SSesS0tY mortgagee may prescribe against mortgagor Period begins when redemption possible Prescription_Mortgagee—Possessory mortgagee holds adversely when mortgagor may redeem—Equity of redemption is a claim in respect to land

A possessory mortgagee may prescribe against the mortgagor; the period of adverse possession begins to run when the mortgagor may redeem, since the equity of redemption is a “claim in respect to land.”

Judgment

                                                     (PROVINCE COURT)

                   HEIRS OF DAOUD MOHAMED v. MOHAMED SADIK MOHAMED

                                              PC-REV-83-1957 (Ed Darner)

Osman El Tayeb P.1, May 10, I958: —This is a revision from decree of District judge, Haifa, dated May 29, I957 in his (3-250. ordering in favour of plaintiff redemption of a mortgage and delivery of possession In respect of the whole of sagia No. 39—12, lshkeit.

Plaintiff and respondent is a lost person whose life or death is unknown.

He left the balad in about 1916 and he had never since been heard of up to this day. So Hassan KhaIil Ibrahim had applied to the Sharia Court and obtained an 11am No. 2—54, Haifa Sharia Court, vesting in him the property of the lost person and entrusting him with its administration. [KhaIiI brought this case for the recovery of possession of sagia No. 39—12, lshkeit, that is still registered in the name of the lost person. from defendants.

It is admitted that the sagia in dispute has been continuously possessed by defendants’ father since about 1916, and that after his death in 1939 the defendants succeeded him. The trustee claimed recovery of possession on the ground that defendants were only mortgagees on a mortgage for which he applied for redemption. Defendants denied a mortgage and applied for rectification of the register on the ground of prescription.

The evidence as to the alleged mortgage is as follows. The trustee himself stated that he heard from defendants’ predecessor in title that he had been in possession of the sagia as a mortgagee to secure the sum of £S. 12. He added that he asked him to give up possession on payment of the money and that defendants’ predecessor refused. P.W. 1, Taha, state:

“Defendants’ predecessor entered into possession in accordance with a deed c mortgage. The deed was made prior to 1914. 1 saw the deed in 1916 . . . It was thumbed by plaintiff’s mother and grandfather in their capacity as guardians of plaintiff who was an infant at that time. The deed was presented to the Settlement Officer (1917) for registration and the Settlement Officer refused it on the ground that the mortgagor was an infant, and wrote on the deed that the sum of £S. was secured to be paid by those who thumbed the deed.” P.W.2, Salih, said: “I heard from defendants’ father that the land in dispute was mortgaged to him. I did not see the deed.” I thought first that this evidence was not weighty enough to establish the alleged mortgage; on the ground that the trustee did not from the start make the allegation that the defendants were mortgagees. He did not mention this in his statement of claim nor in his examination on p. so of the record. However, the finding of the learned District Judge of the existence of the mortgage is not clearly against the weight of evidence; so I should not distrust it. It may also be pointed out that the said mortgage was created when the plaintiff was an infant; so it is not a proper mortgage but only a debt on the person or persons who received the money, who were said to be plaintiff’s mother and grandmother.

The learned District Judge held the opinion that the equity of redemption cannot be extinguished by lapse of time. He relied for this opinion on these points:

(a) the maxim of English law “Once a mortgage always a mortgage.”

(b) Civil Justice Ordinance, s. 119 (1) provides that a suit for redemption can be instituted at any time, that if the mortgagee does not exercise his right of foreclosure the mortgagor can at any time exercise his right of redemption.

(c) The mortgagee is a usufructuary within the meaning of the Pre scription and Limitation Ordinance, S. 3.

I do not agree with him. In my opinion the law is that the equity of redemption is extinguished by lapse of time of to years or more. This rule was held by the Court of Appeal in Heirs of Mur el Gawab Mohamed V. Heirs of Abdel Hadi Abdalla Dar Sileih, AC-REV-46 this was a case of a house in Omdurman. The plaintiff who was a mortgagee entered into possesSion and during his possession extensively rebuilt the plot, and then claimed the plot by prescription. The Court of Appeal expressed its opinion thus:

“In these circumstances we think that the claim to prescription succeeds. None of the ‘principles of possession’ set out in section 4 of the Prescription and Limitation Ordinance 1928, apply to this case, subsection (3) because a mortgagee does not possess on behalf of the mortgagor and subsection (4) because that does not cover the case of a which is not for any term. We think that if a mortgagee who has not given any acknowledgment of the mortgage for 17 years to the mortgagor, then extensively rebuilds on the plot, especially when the debt secured was only £S.4 as in this case, that amounts to public notice to the mortgagor of a denunciation of the mortgage and time then begins to run against the mortgagor. This is called in the Egyptian law which it seems is the origin of our provisions as to prescription an ‘inversion of title’ which in that law renders prescription possible.”

The equity of redemption is a “claim in respect of land” within the meaning of the Prescription and Limitation Ordinance; in case of no acknowledgment by the mortgagee, the right of action thereof is extinguished by lapse of time.

In the present case it is admitted that the predecessor of defendants had first entered into possession in 1916 and remained continuously up to his death in 1939. Without break the same possession has been resumed by defendants until the raising of the case. It is not proved that there was an admission or acknowledgment of their being mortgages, and so there is nothing to stop time running against the mortgagor from the time the secured money had become payable.

This brings me to the discussion of Civil Justice Ordinance, S. 119 (1). It specifies the time for the mortgagor to institute a suit for redemption. In a mortgage agreement the time for the payment of the principal money secured may or may not be specified. When the time is specified the mortgagor cannot institute a Suit for redemption before the expiration of that time, and when the time is not specified the mortgagor cannot institute a suit of redemption before the expiration of one year from the date of the mortgage. The other subsections provide for notice to be given by the mortgagor before he can institute a suit for redemption. It is thus, in my opinion, a restriction on the right of redemption and at the same time a protection to the mortgagee. The words “at any time” do not by any interpretation mean to the end of the world. Any right can be exercised at any time before it is extinguished by lapse of time. So a suit for redemption can be instituted at any time before it is barred by time. The same thing applies to the right to apply for foreclosure.

A mortgagee in possession is not a usufructuary. He is a person who has an interest in the land mortgaged, and that interest subsists until the mortgagor exercises his right or equity of redemption. He enters in possession in accordance with a right or interest, and when the equity of redemption is lost, to use the word used in the above referred to judgment, by occurrence of “inversion” of title the mortgagee will be in adverse possession. The above referred to judgment also stated that the Prescription and Limitation Ordinance, s. 4 (does not cover a mortgagee; that a mortgagee is not holding on behalf of another.

It remains to say a word about the principle of “Once a mortgage always a mortgage.” It means that in the mortgage agreement the mortgagee cannot make any conditions, which will prevent the mortgagor from the recovery of his property. Romer J., in Biggs v. Holddintoo [2 Ch. 307. quoted in Cheshire, Modern Law of Real Property 586 (6th ed. 1949), stated:

“ . . . that on a mortgage you cannot, by contract between the mortgagor and mortgagee, clog, as it is termed, the equity of redemption so as to prevent the mortgagor from redeeming on payment of principal, interest and costs.”

This principle makes any condition or stipulation made in the contract itself, which prevents the mortgagor from redeeming, null and void.

For these reasons decree of District judge, Haifa, dated May 29, 1957, is set aside, and decree in favour of plaintiffs is passed.

Editors’ Note. —This decision was affirmed as to result by Mohamed Saddik Mohamed v. Heirs of Daoud Mohamed, AC-REV-121-1 (1961)

S.L.J.R. 125 (Babiker Awadalla J.), but Mr. justice Babiker Awadalla in the fifth paragraph of his opinion confines this holding to the possessory mortgagee (in what in England would be a “Welsh mortgage “); and in the sixth paragraph he states that possession cannot be adverse, and therefore the prescriptive period cannot begin to run, until there has been denunciation by the possessory mortgagee. The holding of Heirs of Nur El Gawab Mohamed v. Heirs of Abde! 1-ladi Abdalla Dar Si!eih, AC-REV-46- relied on by Judge Osman El Tayeb, is narrow. In that case the possessory mortgagee on a debt of £S.4 had been in possession for more than 30 years, and had built extensively on the land more than 20 years before the suit was brought for prescriptive title. The court held in the paragraph quoted by Judge Osman El Tayeb that extensive building on a plot the mortgage of which secured a debt of only £S.4 constitutes public notice of denunciation by the possessory mortgagee which starts the prescriptive period of adverse possession running.