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Madras High Court
Govivdaswami Thevan vs T.M. Doraiswami Pillai And Ors. on 14 March, 1910
Equivalent citations: 6 Ind Cas 781
Bench: R Benson, K Aiyar


1. The question in this case relates to subrogation. Is the 4th defendant, the purchaser of items Nos. 1 to 26, entitled to stand in the shoes of Chengammal, the 1st mortgagee, against the plaintiff, the puisne incumbrancer? Chengammal had a mortgage on items Nos. 1 to 13. The 4th defendant agreed to pay off Chengammal’s mortgage with part of the purchase-money, and it was so discharged. He also agreed to discharge the plaintiff’s mortgage with the remainder of the purchase-money, but failed to do so. He contends that he is entitled, on the principle of the decision in Gokaldas Gopaldas v. Puranmal Premsukh Das 10 C. 1035 : 11 I.A. 126, to keep alive Chengammal’s mortgage as it is for his benefit to do so. The District Judge, relying on Srinivasachari v. Gnana, Prakasa Mudaliar 30 M. 67 : 2 M.L.T. 36, has refused to uphold his contention. We may at once say that the decision in Srinivasachari v. Gnana Prakasa Muduliar 30 M. 67 : 2 M.L.T. 36, has no application. There the first mortgagee had an incumbrance upon many items of properties of which a few were conveyed to the purchaser. It was held that the payment having released the remaining items from the incumbrance, it was impossible to assume the subsistence of the first mortgage upon the items purchased to be used as a shield against the intermediate incumbrancer. The presumption in Gokaldas’s case 10 C. 1035 : 11 I.A. 126, for the benefit of the subsequent purchaser (see p. 1,046), is rebutted when the intention to release the properties from the 1st charge is otherwise clear. In the present case, it is clear on the facts that the intention to keep alive the first mortgage as against the puisne incumbrancer cannot be presumed as the object of the 4th defendant’s transaction was not to keep alive a mortgage against the puisne incumbrancer but to discharge the puisne incumbrance as well. See Jones on Mortgages, Section 858. The question has been elaborately discussed by Justice Mookerji in Surji Ram Marwari v. Sarnam Deo Prasad 2 C.L.J. 288 at p. 298 and that decision has been followed in Bisseswar Prasad v. Lata Sarnam Singh 17 M. 62 at p. 64. See also Narayanasawmi Naidu v. Narayana Rau 17 M. 62 at p. 64. The rule as to subrogation only applies when the purchaser has not covenanted to discharge the previous incumbrance. See Sheldon on Subrogation, Section 28. In the present case both the previous mortgages were arranged to be discharged by the purchaser and not merely the 1st mortgage. As the principle of subrogation by payment to the prior incumbrancer rests upon presumption of an intention to keep alive the, first mortgage as a shield against the puisne incumbrancer, we are safe in holding that that presumption is rebutted when the transaction in question contemplates the discharge of the puisne incumbrancer by payment out of the purchase-money. We must, therefore, dismiss the second appeal with costs.

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