1. A preliminary objection has been taken that no appeal lies, as the suit is of the nature of one cognizable by a Court of Small Causes. This objection fails. The suit is brought to compel defendant to refund assets of an execution-sale which he was not entitled to receive, and to set aside the order of the Court executing the decree, which directed the payment of the assets to him. This is a suit expressly allowed to be brought in a Civil Court under the provisions of the penultimate paragraph of Section 295, and cannot be regarded as one of those cognizable by a Court of Small Causes.
2. With regard to the appeal, it appears that the plaintiff and the defendant hold mortgage-bonds executed in their favour by the same person. The plaintiff's bond is dated the 16th June 1882, and is registered, the registration being compulsory. The defendant's is of prior date, the 30th December 1880, but unregistered, the registration being optional.
3. Both instituted suits on their bonds against the obligor, and obtained decrees for sale of the property mortgaged, the decrees being made on the same day. The plaintiff took out execution, and applied for attachment and sale of the property on the 9th August 1882, and the defendant did likewise on the 12th August, and attachment was made of the property on the 14th August 1882, apparently on both applications.
4. The property was sold in satisfaction of both decrees on the 28th February 1883, and bought by plaintiff, who deposited the sale-price; and be claims the right to the assets of the sale to satisfy his decree before any can be taken by the defendant, on the ground that his incumbrance has preference over defendant's under his registered bond, under the provisions of Section 50 of the present Registration Act, which governs the deeds in this case.
5. Now there is no doubt in my mind that the registered bond of the plaintiff takes effect as regards the property comprised in it against the defendant's unregistered bond under Section 50. This gives priority to the incumbrance created over the incumbrance created by defendant's bond; and this priority is not affected by the subsequent decrees obtained on the bonds, which only give effect to the respective rights under the bonds.
6. We have then here attachments and a sale of property in execution of two decrees, which ordered the sale of the property for the discharge of incumbrances thereon--a state of things which is provided for by Section 295, Civil Procedure Code, which contemplates the application of the sale-proceeds according to priority of incumbrances. The 3rd proviso to Section 295 is as follows: 'When immoveable property is sold in execution of a decree ordering its sale for the discharge of an incumbrance thereon, the proceeds of sale shall be applied--first, in defraying the expenses of the sale; secondly, in discharging the interest and principal money due on the incumbrance; thirdly, in discharging the*interest and principal moneys due on subsequent incumbrances (if any); and fourthly, rateably among the holders of decrees for money against the judgment-debtor, who have, prior to the sale of the said property, applied to the Court which made the decree ordering such sale for execution of such decrees, and have not obtained satisfaction thereof.' The meaning of the section is obvious, that when immoveable property is sold in execution of decrees ordering its sale for the discharge of incumbrances, the sale-proceeds are to be applied in satisfaction of incumbrances according to their priority. On this view the plaintiff is entitled to have the money due on his incumbrance first discharged, and the appeal prevails, and the decrees of the lower Courts are set aside, and the claim is decreed with all costs.