Swaminatha Pillai vs Krishna Iyer and Others

The plaintiff sues to recover the money due under a mortgage instrument executed by the 1st defendant in 1905. The amount was advanced to

discharge a mortgage debt of Rs. 400 due to one Sivan Sivasami under a mortgage dated November 1901. The finding is that the mortgagor

discharged that mortgage by paying the creditor Rs. 300 out of the amount received from the plaintiff and by the execution of a promissory note for

Rs. 50 the balance Rs. 50 having been given up by the mortgagee. The appellant claims under a. mortgage dated October 1903 and contends that

the plaintiff is not entitled to any priority on account of his discharge of the prior mortgage. His contention has been disallowed by the lower

Courts.

It is argued before us in second appeal that though the entire mortgage debt has been discharged, as only Rs. 300 a portion of the mortgage

debt was paid out of the money advanced by the plaintiff, and the balance Rs. 50 was paid by the mortgagor himself, he cannot claim a first charge

to that extent. It is contended that it is only when the person claiming subrogation discharges the entire debt that he is so entitled. Reliance is placed

in support of this contention on the cases reported in Hanumantha Aiyan v. Meenakshi Naidu ILR (1910) M. 183, and Gurudeo Singh v.

Chandrikah Singh and Chandrikah Singh v. Rashbehary Singh ILR (1907) C. 193.

It appears to us that this contention cannot be supported and the question is concluded by authority. In Rupabai v. Audimoolam ILR (1887) M.

345 the debt due to one Meenakshi Naik the first mortgagee under a hypothecation deed (Exhibit VII) was discharged to the extent of Rs. 27,713

by the 4th defendant in that suit and the balance which came to over a lac of rupees by the mortgagor himself, and it was argued that the 4th

defendant had not therefore acquired any priority over an intermediate mortgagee. The learned Judges pointed out that if the whole amount lent by

the 4th defendant has been applied to pay off the entire debt due under Exhibit VII he would have priority of that charge to the full amount. Then

they, said "" But only Rs. 27,713 was so applied, and the question is does that fact prevent the application of the rule above stated"", and they

replied "" We do not think it does "". They pointed out that the hypothecation under Exhibit VII i.e., the whole charge, was released and the

mortgagee after that has no hypothecation on the villages. The case according to them was therefore governed by the Privy Council Judgment in

Gokal Das v. Puranmal and the defendant No. 5 in that case who had paid a part of the amount of the first charge ranked to that extent and

interest in the priority of that first charge.

The decision is thus directly in point and is not overruled by Hanumantayyan v. Meenakshi Naidu ILR (1910) M. 183. We see no reason to

doubt its soundness. We accordingly dismiss the second appeal with costs.