(1.) This appeal arises out of a suit upon an equitable mortgage. It appears that the defendant No. 1 had mortgaged certain properties to the plaintiff under two successive mortgage-bonds, and delivered to him the title deeds of the property. Subsequently on the 25th February 1914 she took a loan of Rs. 1,500 upon the security of the title deeds, executing a promissory note for the said amount. A letter was written by her on the same date to the plaintiff which ran as follows: "Dear Sir, For re-payment of the sum of Rs. 1,500 with interest I have borrowed from you on a pro-note of date, I hereby put on record that the title-deeds re my premises No. 1, Garpar Road, already deposited with you shall be held as collateral security."
(2.) The question for consideration was whether the transaction constituted a valid equitable mortgage. The Court of first instance held that the letter not being registered was inadmissible in evidence and dismissed the suit. On appeal the learned District Judge held that it did not require registration, that an equitable mortgage was created and accordingly decreed the suit. The defendant No. 2, who is the subsequent purchaser of the property and who contested the suit, has appealed to this Court.
(3.) The question whether there was an equitable mortgage depends upon the question whether the letter constituted the contract of mortgage, or whether there was a mortgage independently of it and the letter was merely a memorandum of facts from which the contract might be inferred. As stated in Sir Rash Behari Ghose s Law of Mortgage, 4th Edition, page 155: "Where the memorandum accompanying an equitable mortgage does not embody the contract between the parties but is a mere record of certain facts, an equitable mortgage may be established by the mere deposit of title deeds and the advance of money on such deposit, notwithstanding the provisions of the Registration Act."