SAGARMULL NATHANY Vs. JOHN CARAPIET GALSTAUN

JUDGEMENT

(1.) This is an appeal in two consolidated suits (Nos. 1136 and 1138 of 1920) brought by the assignor of the appellant against the respondent. The consolidated suits were tried before Chotzner, J., in the High Court of Judicature at Fort William in Bengal, Original Civil Jurisdiction, with the result that a decree in favour of the plaintiff was made on 24 January 1927. The respondent appealed, and on 16 January 1928, the High Court Civil Appellate Jurisdiction reversed Chotzner, J., and dismissed the consolidated suits. The appellant thereupon appealed to His Majesty in Council. The story of the transactions out of which the suits arise is somewhat intricate, but for the present purpose is sufficiently stated in what follows.

(2.) One Pity owed the appellant money and in March 1910, the appellant obtained a decree against Pity for Rs. 1,40,000. Pity was the owner of property in Wellesley Street, Calcutta. An arrangement was entered into and carried out between Pity, the appellant and the respondent to the following effect. The appellant borrowed from the Bank of Bengal Rs. 1,50,000. To enable the appellant to obtain this loan the respondent for a one per cent commission, guaranteed the loan to the Bank. The appellant drew a promissory note for the amount borrowed from the Bank in favour of the respondent, who endorsed it over to the Bank. Out of the money so borrowed the appellant lent to Pity the amount required to enable the latter to discharge his indebtedness to the appellant. Pity accordingly paid his debt to the appellant. At the same time Pity deposited with the appellant and the respondent the title deeds of the Wellesley Street property to secure the amount lent to him by the appellant.

(3.) It is not suggested that as between the appellant and the respondent the latter had any interest in Pity's mortgage beyond his right to be secured thereout against his liability as guarantor to the Bank for the appellant's debt.