1. The only question argued in this appeal is whether the District Judge is correct in refusing to allow the plaintiffs the tight of subrogation in respect of sums admittedly expended by them in discharge of two mortgage decrees (O.S. Nos. 841 of 1900 and 178 of 1902 on the file of the Court of the District Munsif of Namakkal) enforceable against the suit properties.
2. The facts areas follows: The plaintiff's father was the vendee of the suit lands under a sale deed, Exhibit B, dated the 14th December 1904 for Rs. 1500, of this sum Rs. 870 was represented by the discharge of a mortgage decree held by the plaintiff's father himself against the property. In respect of this, the Judge has allowed the plaintiffs claim. The balance was to be applied; and, admittedly, was in fact applied, in discharge of the two decrees above mentioned, based on mortgages of the said property. Exhibit B was executed during the pendency of a suit O.S. No. 1092 of (1904) brought by the 5th defendant, Kali Mudali, on a fourth mortgage; and on this ground, it was held to be invalid against Kali Mudali (vide Exhibit H judgment in O.S. No. 358 of 1906 on the same Munsif's file confirmed in appeal). The present contesting Respondents Nos. 1 to 3, are parties who purchased the property in execution of Kali Mudali's decree.
3. The plaintiffs' rights as purchasers having thus disappeared, they claim to be subrogated in respect of the prior mortgages on the property discharged by them.
4. The District Judge has refused to allow their claim on the following ground. He says:
The test is, did the plaintiff's father intend to keep alive the prior mortgage? Admittedly he knew nothing of the 5th defendant's mortgage at the time he purchased the properties conveyed to him under Exhibit B, and there seems no reasonable doubt that when he agreed to discharge the three previous mortgages as consideration for his sale-deed, he had no intention of keeping them alive.
5. The leading case on the point is that of Gokuldas Gopal Das v. Premsuklas I.L.R. (1884) C. 1035 wherein their Lordships of the Privy Council laid down the rule, which has been followed in all later cases, that, where a man who pays oft a mortgage has a right to extinguish it and a right to keep it alive, in the absence of express evidence of intention, he should be assumed to have acted according to his interest. The present is a case exactly in point The plaintiff's father at the time he discharged the mortgages had the option of extinguishing them or keeping them alive. It cannot be said that there is any express evidence of what his intention actually was. No doubt, at the time of payment he believed himself to have acquired a good title to the equity of redemption. But this was not so. His title was invalid, against Kalimudali, as has been already explained ; and for all the good it did him was non-existent. His real interest certainly dictated keeping alive the incumbrances ; and this is the intention that should be ascribed to him in pursuance of the rule laid down in the case above quoted. As authority for holding that we must look to the real facts, and not to the facts as the person who paid off the mortgages conceived them to be at the time of payment, we may refer to the judgments of the Chief Justice and Munro J. in Mahalakshmi Animal v. Sriman Madhava Siddanthi Marhim Nidhi I.L.R. (1911) M. 642.
6. Reliance is placed by the Respondent's Vakil on the cases reported in Srinivasachari v. Gnana Prakasa Mudaliar I.L.R. (1906) M. 67 and Govindasami Thevan v. Doraisami Pillai I.L.R. (1910) M. 119 These cases are simply authority for holding that, where a person who has actually acquired the equity of redemption pays off a prior mortgage, he cannot claim the right of subrogation in respect of that mortgage as against a puisne mortgagee. Such a person does not really come within the scope of the Privy Council ruling in Gokuldas's case. Any doubt as to his intention is cleared up by Section 101, Transfer of Property Act. Unless he declares his intention to keep the mortgage alive, it becomes extinguished by the mere fact of discharge.
7. I would reverse the decree of the District Judge and restore that of the Munsif. The defendants Nos. 6 to 8 should bear the costs of the plaintiffs-appellants in this and the District Court.
8. I concur.