Venkatasubba Rao, J.
1. The plaintiff sues on an equitable mortgage. The 1st defendant created the mortgage and as he has become an insolvent, the 4th defendant the Official Assignee now represents his estate. The 2nd defendant is the son of the 1st defendant and the 3rd defendant holds a subsequent mortgage.
2. The first point I have to decide is the one that has been raised on behalf of the 2nd defendant. I must clearly point out that this point has not been urged either by the 1st, the 3rd or the 4th defendants. They have expressly said they do not desire to urge that contention. The mortgage was created by deposit of title deeds. It now transpires that the 2nd defendant is in possession of a portion of the title deeds relating to this property. He produces them in Court and contends that as the deposit was not of all the title deeds a valid equitable mortgage could not have been created.
3. To deal with this argument, it is necessary in the first instance to examine whether it was a single house that was mortgaged or the property consists of two houses. It has been very clearly proved that on the date of the mortgage, the property was a single entire building having one street door and presenting the physical features of a single structure. The plaintiff before advancing the loan inspected the house and his evidence is to this effect. His statement has not been challenged in cross-examination. Moreover, the Corporation of Madras as well as the Taluk Office have treated the property as a single building and I must hold that the property mortgaged is one house known as 3/4, Amman Koil Street.
4. The truth seems to be that originally there were two adjacent houses, 3, Amman Koil Street and 4, Amman Koil Street, and they were subsequently amalgamated and rebuilt as a single building. On the 23rd of June, 1924, the 1st defendant who applied to the plaintiff for a loan, handed to him certain title deeds, which were then presumed to be the entire set of deeds relating to the property. The plaintiff showed them to his lawyer who pointed out to him that the bundle of title deeds included Collector's Certificates only in respect of House No. 4 and that there were none in that bundle that related to House No. 3. The plaintiff however advanced to the 1st defendant on the 24th, 25th and 26th June 1924 monies amounting to Rs. 15,000. The 1st defendant apparently finding that he was not in possession of any sale deeds or certificates relating to No. 3, passed a letter to the plaintiff dated the 27th of June, 1924 which contained a recital that the Certificates in respect of No. 3 had been lost. This letter satisfied the plaintiff and he took no further trouble over it. There is not the slightest doubt that the deposit was made with the intention of creating a security over the entire property. The title deeds handed to the plaintiff comprised not only the Certificates in respect of No. 4 but a copy of a partition deed which showed that both the houses Nos. 3 and 4 fell to the 1st defendant's share at a family division and that he was entitled to them. It is in virtue of this partition deed that the 1st defendant became the owner of both the houses and that deed may therefore be aptly described as the immediate source of his title. In the nature of things, the original partition deed could be only with one of the several parties who effected the division. The 1st defendant not being in possession of the original delivered a copy obtained from the Registrar's Office. We thus find that some of the older title deeds relating to a portion of the property were not deposited, while an authenticated copy of the latest deed relating to the entire property, which is the foundation of the 1st defendant's title was among the deeds handed to the plaintiff. In these circumstances, it is impossible to hold that a valid equitable mortgage has not been created. It must be remembered that the contest in this case is not between two rival mortgagees each producing a portion of the title deeds. On the contrary, this is an attempt made by the 2nd defendant to get rid of his father's transaction, taking advantage of the fact that he has somehow got possession of the missing documents. His contention is not only unjust but unsustainable in law. In the deed of subsequent mortgage executed in favour of the 3rd defendant, the 1st defendant made an admission that the whole property had been previously mortgaged to the plaintiff. I therefore reject this contention put forward by the 2nd defendant.
5. There remains another point to deal with--a point taken by the Counsel for the 4th defendant. He contends that a valid mortgage was not created as the document of the 27th of June was not registered. His argument is (1) that the oral evidence is not admissible under the Evidence Act, as the instrument constitutes the contract between the parties; (2) that the document is inadmissible in evidence under the Registration Act as it affects immovable property but is not registered. The point to be decided in such a case is : Does the document in question constitute the bargain between the parties or is it merely the record of an already completed transaction? Turning to the document it reads thus:
I pledged with you as collateral security the Collector's certificate relating to the said house...on 23rd June, 1924.
6. The document is dated the 27th and it refers to a transaction which had taken place four days previously.
7. The document proceeds to say
I borrowed from you on the 24th, 25th and 26th sums amounting to Rs. 15,000 and agreed to pay interest.
8. Again it is the past tense that is used. The passage says that the writer had already borrowed money and had already agreed to pay interest.
9. The most authoritative exposition of the law is that contained in the judgment of the Privy Council in Subramanian v. Lutchman ILR (1922) C 338 : 1922 44 MLJ 602. The test that was applied in that case was : Was the document in question the bargain between the parties? On the facts of that particular case it was held that the writing constituted the contract, that parol evidence could not therefore be. given and that the document itself being unregistered did not create a valid mortgage. Let us look at the document in that case. It reads thus:
We hand you herewith the title deeds.... This please hold as security.... Please also hold this as further security.
10. There can be no doubt that this evidences the transaction itself and is not merely the record of an already completed transaction. In Krishnayya v. Ponniuswami Aiyar ILR (1923) M 398 : 46 MLJ 295 the document was held to be the mere record of an already completed transaction. The words in that document are:
So, let it be known that for that I have retained with you as collateral security my document of the Collector's Certificate No. 815 in respect of my house.
11. Sir Walter Schwabe, C.J., with whose judgment Ramesam, J., concurred, observed as follows:
If it constitutes the bargain, then, on the well-known rule that, where contracts are reduced to writing, you cannot give parol evidence of their contents, in order to prove the mortgage, the plaintiff would have to attempt to put in as evidence the document, and, if it is a mortgage document, he would be precluded from so doing, by the Transfer of property Act and under the Registration Act.
12. Looking at the document the learned Judges held that it did not constitute the bargain. The present case is a much stronger one. The instrument refers in no uncertain terms to the transaction having been completed some days previously. As was said in that case by Sir Walter Schwabe, C.J., 'In order to arrive at the true facts in respect of that question, I think that the first thing to do is to look at the document itself.' In this case there can be no manner of doubt that the document does not require registration. I have carefully followed the oral evidence and it also shows that the transaction had already been completed when this letter was written.
13. The only question that remains is, What are the amounts due to the plaintiff and the 3rd defendant? The plaintiff is content to take a decree calculating simple interest at 15 per cent. I pass a decree for the plaintiff for Rs. 20,343-12-0 with subsequent interest on Rs. 15,000 at 15 per cent. per annum from this date to the date fixed for payment. I pass a similar decree in favour of the 3rd defendant for Rs. 11,838-8-0 with subsequent interest upon Rs. 10,000 at 12 per cent. per annum from this date to the date fixed for payment. The costs of the plaintiff and the 3rd defendant shall be paid by defendants 1, 2 and 4. I fix the fee of the 2nd defendant's guardian ad litem at Rs. 150 which the plaintiff will be allowed to include in his costs. Time for redemption is three months.
14. The portion of the title deeds produced by the 2nd defendant is in Court and the same shall be treated as part of the deeds deposited with the plaintiff.