KANDASAMI NAYAKKAR Vs. VENKATA REDDIAR

JUDGEMENT

(1.) The facts of this case appear from my learned brother's judgment, which I have had the benefit of perusing, and from the judgment of the Court below. The important points to be noted are: first, that the 1 defendant, who was an adult in 1912, when the suit mortgage (Ex. A) was executed by his father, Akkala Naicker, did not join in executing if, and that therefore he and his minor sons, Defendants 2 and 3, who are the three appellants before us, are not directly bound by it; secondly, that between the date of the earlier mortgage of 1898, executed by Akkala Naicker, on behalf of himself and his then minor son, 1st defendant, and the date of the suit mortgage, there was a partition in 1907 between Akkala Naicker and 1 defendant, in which the mortgage of 1898 was allotted to the share of the father, Akkala Naicker, and therefore Akkala Naicker had no power to encumber the separate estate of 1 defendant, even if he intended to do so, and that he had an intention to do so is not apparent from his action, in signing only on behalf of himself and 4 defendant, his minor son by a second wife. The only question for our decision in this appeal, apart from a question of limitation, which it becomes unnecessary to decide, if on this point we find for the appellants, is whether the plaintiff has any right, through subrogation, to bring the properties of the appellants to sale, on account of part of the consideration of Ex. A having gone to discharge the debt under Ex. B.

(2.) Upon this question I think that the Subordinate Judge was mistaken, in following the decision, in Chidambaram Nadan V/s. Muni Nagendrayyan [1920] 12 L.W. 393, as if the facts of that case were similar to the present. That was a case, where there was an intermediate encumbrance. The 4 mortgagee, having paid off the 1 and 3 mortgagees, claimed to stand in the shoes of the 1st mortgagee and to have priority over the 2nd mortgagee. The learned Judges held that because the 4bh mortgagee had undertaken in writing to pay off the prior mortgagee with his own money, there was a presumption, that he intended to keep that encumbrance alive for his own benefit. They refer to certain observations of Srinivasa Ayyangar, J., in Muthammal V/s. Razu Pillai [1918] 41 Mad. 513, as obiter and say that they were coloured, by a view of the effect of Mohesh Lal V/s. Mohant Bawan Das [1883] 9 Cal. 961, which they regarded as erroneous. I can only understand this as meaning that they considered Srinivasa Ayyangar, J.'s view to be erroneous and not that they doubted the correctness of Mohesh Lal V/s. Mohant Bawan Das [1883] 9 Cal. 961, which is a Privy Council decision. I do not find any essential conflict of principle between Mohesh Lal v. Mohant Bawan Das [1883] 9 Cal. 961 and Gokaldas Gopaldas V/s. Puranmal Premsukhdas (1884) 10 Cal. 1035, which is also a decision of the Privy Council. The latter was a case where a purchaser of the equity of redemption, who exercised the owner's right of redeeming his property, from encumbrances paid off the first mortgagee and then used that prior mortgage, as a shield against the claims of a subsequent mortgagee. When the question arose, whether the party paying off the charge intended to extinguish it or to keep it alive, their Lordships observed that he must be presumed to have acted according to his interest. In Mohesh Lal V/s. Mohant Bawan Das [1883] 9 Cal. 961, the plaintiff lent a sum of Rs. 10,641, in cash, which was used by Mangal Das, partly to pay off a debt to another creditor, named Lakshmi Narain, to whom he had mortgaged not only three villages, belonging to a religious institution, held by him under a grant from the then Mohant, but also one village of his own purchased by him with money lent by the plaintiff previously. The question arose whether Mangal Das intended to keep Lakshminarain's mortgage alive. Their Lordships held that Mangal Das had no interest in keeping Lakshminarain's mortgage alive, and that it was paid off by him and not by the plaintiff. Then they observe: It must be presumed that, when the plaintiff lent the money to Mangal to pay off the mortgage he lent it upon the security expressed in the bond and for which he stipulated. Equity cannot give him an additional security because the security relied upon turns out to be bad as regards a portion of the lands included in it.

(3.) Similarly, in the present case there is no room for a presumption of an intention on the part of the parties, that Ex. B should be kept alive, after it was discharged. There was no intermediate encumbrance, against which it might have served as a shield. Before the subsequent mortgage was executed, the prior mortgage had been discharged and ceased to exist. Section 74 of the Transfer of Property Act gives a subsequent mortgagee a right to pay off a prior mortgagee, but he cannot by so doing enlarge the scope of the security which he had got by his own mortgage deed, upon the property of his mortgagors. This section covers independent acts of subsequent mortgagees, paying off prior mortgagees, and has no application to the facts of this case. For Avudayammal's mortgage was finally discharged on April 12th, 1912, before the plaintiff's mortgage was executed on April 21st, 1912, as it appears from the endorsement on Ex. B. Section 91 is not applicable because the plaintiff had no interest in redeeming property other than what was legally the subject of his mortgage. In the words of Sir Barnes Peacock: There is nothing in the bond, or in the evidence, or even in the surrounding circumstances, to show that the mortgagor (there Mangal, here Akkala Naicker) intended to keep the mortgage (there Lakshminarain's here Avudayammal s) alive, or that he or the plaintiff intended that the latter should hold that mortgage as an additional security for the loan.