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Unnamalai Ammal Vs. Gopalaswami Chetti and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1931Mad199; 129Ind.Cas.655; (1931)60MLJ69
AppellantUnnamalai Ammal
RespondentGopalaswami Chetti and ors.
Cases ReferredFlint v. Howard
Excerpt:
- - the rights, of the 1st mortgagee or any other person who has acquired for consideration an interest in either property'.as the section refers to the right of the 2nd mortgagee to have the debt of the 1st mortgagee satisfied out of the property not mortgaged to the 2nd mortgagee, it is clear that the time with reference to which the section is speaking is the time when the prior mortgagee seeks to realize his mortgage amount. the section is therefore clearly in favour of the appellant......not in the suit in favour of 3rd defendant's father in 1914 by ex. e. the plaintiff obtained a mortgage decree in small cause no. 8 of 1926 against the 1st defendant and in execution of the decree purchased the properties in schedule b by a sale certificate, ex. iv, dated 6th august, 1917. afterwards, the 2nd defendant in execution of a decree in small cause no. 1238 of 1914 purchased in court auction the properties in schedule a. in 1917 a suit was filed by the 1st mortgagee to enforce his mortgage impleading the 1st defendant, the plaintiff, the 2nd defendant and the 3rd defendant and obtained a decree on the 8th february, 1919: ex. c. he applied for execution of the decree in july, 1923. the plaintiff paid off the decree amount. the plaintiff now brings the suit for contribution.....
Judgment:

Ramesam, J.

1. The facts of the second appeal may be stated as follows: The 1st defendant was the original owner of the suit properties which are described in Schedules A and B of the plaint. Both these sets of properties were mortgaged to Kuppuswami Pillai on the 20th June, 1910, under Ex. I. Afterwards the 1st defendant effected a second mortgage of the properties in Schedule A only and some other properties not in the suit in favour of 3rd defendant's father in 1914 by Ex. E. The plaintiff obtained a mortgage decree in Small Cause No. 8 of 1926 against the 1st defendant and in execution of the decree purchased the properties in Schedule B by a sale certificate, Ex. IV, dated 6th August, 1917. Afterwards, the 2nd defendant in execution of a decree in Small Cause No. 1238 of 1914 purchased in Court auction the properties in Schedule A. In 1917 a suit was filed by the 1st mortgagee to enforce his mortgage impleading the 1st defendant, the plaintiff, the 2nd defendant and the 3rd defendant and obtained a decree on the 8th February, 1919: Ex. C. He applied for execution of the decree in July, 1923. The plaintiff paid off the decree amount. The plaintiff now brings the suit for contribution against 'A' schedule properties in the hands of the 3rd defendant. It may be mentioned that the 3rd defendant himself in 1922 filed a suit on his mortgage and obtained a decree and purchased the properties in execution of his own decree (Ex. II). This was on the 8th February, 1924. Both the Lower Courts holding that the 3rd defendant has got the right of marshalling under Section 81 of the Transfer of Property Act denied the right of contribution and dismissed the plaintiff's suit. The District Munsif in his judgment referred to Rajkeshwar Prasad Narain Singh v. Mohammad Khalil-ul-Rahman I.L.R. (1924) Pat. 522. It is also relied on by the advocates for the respondent before us. That decision and the decision in In the matter of Joshy Assam I.L.R. (1895) C 290 merely decide that the right of marshalling which a second mortgagee has got is not lost by the fact that he afterwards purchases in execution of his own decree. But the point with which we are concerned now is not whether, the respondent is not entitled to the right of marshalling by reason of the fact he has purchased in execution of his own decree but whether he has got the right of marshalling against a person in the position of the plaintiff. Section 81 of the Transfer of Property Act says that the right of marshalling exists against a mortgagor but not 'so as to prejudice; the rights, of the 1st mortgagee or any other person who has acquired for consideration an interest in either property'. As the section refers to the right of the 2nd mortgagee to have the debt of the 1st mortgagee satisfied out of the property not mortgaged to the 2nd mortgagee, it is clear that the time with reference to which the section is speaking is the time when the prior mortgagee seeks to realize his mortgage amount. If at that time there is already a person who has acquired for valuable consideration an interest in the property not mortgaged to the 2nd mortgagee, then the right of marshalling does not exist. The section is therefore clearly in favour of the appellant. Primarily, the right of marshalling is a right given against a mortgagor. Any further extension of the equity must be made very clear by the language of the statute. Halsbury's Laws of England, Vol. XXI, Section 544 relied on by the respondent is against him. It does not exempt right of marshalling in express terms against purchasers. It allows it against mere judgment-creditors. This obviously refers to judgment-creditors who had not become purchasers. The case cited in the footnote 'c' in Gray v. Stone (1893) W.N. 133 refers to a case of judgment-debtors who had not yet purchased before the question arose. The dictum of Lord Justice Kay in Flint v. Howard (1893) 2 Ch. 54, viz., 'It is not enforced against a mortgagee or purchaser of the other estate' supports the appellant. The right of the appellant not to be marshalled does not depend upon whether he had notice of the 2nd mortgage. Seo Ghose on Mortgages, Vol. II, page 812. We think, therefore, that the Courts below have erred in dismissing plaintiff's suit. The plaintiff is entitled to contribution. No finding has been given as to the amount to which the plaintiff is entitled. The Court will have to find the amount which can be rateably charged upon the properties in 'A' Schedule with reference to the value of the properties at the time of the 1st mortgage. The Court will submit its finding upon the 5th issue with reference to the above remarks with such incidental consideration of the 3rd issue as may be necessary. Time 1 month after the re-opening of the High Court. Time for objections 7 days.


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