BRAHMANDAM VENKATA LAKSHMINARAYANA RAO Vs. ALLAMNENI VENKAYYA

JUDGEMENT

(1.) The question of law before us is whether the 14 defendant who purchased mortgaged properties from the original owners is entitled by subrogation to priority over the plaintiff, a prior mortgagee, because out of the consideration for the sale the whole of the mortgage decree in O.S. No. 17 of 1905 on the file of the District Court, Guntur and a portion of the mortgage decree in O.S. No. 16 of 1905 on the file of the same court were satisfied.

(2.) The Subordinate Judge seems to have been of opinion that the principle enunciated in Hanumanthaiyan V/s. Meenatchi Naidu (1911) I.L.R. 35 Mad. 183, that in order to sustain a claim for priority there must be a complete discharge of the prior mortgage and that partial discharge creates no equitable rights of priority would only apply to cases referred to therein of advances being made by a number of persons which would give rise to difficulties in working out the rights of several parties all claiming to rank as first incumbrancers; and he relied on Ummachankutti V/s. Ummarkutti Haji (1915) 29 I.C. 583, as being a later ruling of this Court on this point of law.

(3.) The facts of that case were however quite dissimilar and the question decided therein was as to the power of a Court to give an equitable charge to an assignee upon setting aside a sale in fraud of creditors.