1. Of the whole property mortgaged in 1889 to Subapathy for Rs. 1,300 three parcels were sold by the mortgagors on the 16th of April 1892, one parcel to the 3rd defendant's father for Rs. 1,000, one to the 4th defendant for Rs. 200 and one to the plaintiff for Rs. 500. The plaintiff paid cash for his purchase, but the other purchasers each undertook to pay the price to the mortgagee towards the mortgage. Subsequently Sabapathy's assignee brought to sale the property purchased by the plaintiff. And the plaintiff, to save it, paid up part of what was due on the mortgage. He now seeks contributions from the present owners of the other two parcels and the first question for our determination is as to the correct method of calculating the contribution.
2. The plaintiff claims that the 3rd and the 4th defendants being bound to pay Rs. 1,200 towards the mortgage must be held liable for that amount, and the rateable distribution over all the property should be made only for the balance. Section 40 of the Transfer of Property Act, was relied on by Mr. Srinivasa Aiyangar on the plaintiff's behalf; but as we understand that section, it could apply to this case, only if there were found to be a contract between the plaintiff and his vendors that the land sold to other purchasers should be liable for Rs. 1,200 of the mortgage money and it is not found that there was such a contract.
3. Mr. Srinivasa Aiyangar placed his chief reliance on an equitable rule profounded as follows in Jones on Mortgages (6th Edition), Section 743:
A purchaser of a portion of the estate subject to a mortgage has no equity to have his land relieved of the burden of the mortgage as against a subsequent purchaser when it was a part of his contract of purchase that he should pay the purchase money directly in satisfaction of the mortgage. On the contrary the subsequent purchaser has no equitable right to have the purchase money so applied in exoneration of his own land.
4. In some cases the Courts in applying this rifle have, it would seem, based it on the ground that the benefit of the covenant by the prior purchaser may be regarded as running with the title, and so passing to the subsequent purchaser of another part of the land (See foot-note No. 99, page 761 of Jones on Mortgages, 6th Edition.). But the decisions from which extracts are given in foot-notes 102 and 103 on the next page appear to be on a different ground. In the later case Pearson v. Bailey 177 Mass. 318 vide foot-note 103 the Chief Justice said 'the benefit of a contract as a contract goes to the plaintiff (the subsequent purchaser) no more in equity than by the Common Law. The promise in its entirety does not concern the plaintiff's interests. The only question is whether the plaintiffs can get any help from it to relieve her land...; if the mortgagor had seen fit to convey his land as free from the mortgage the plaintiff would have taken it free as against the defendant (a prior purchaser who assumed the mortgage) not on the ground of succession to the mortgagor, but because in no other way could the rights of the mortgagor be made effectual.... That was what was decided in Jagar v. Vollamgar 174 Mass. 531. This last appears to be the case from which an extract is given in foot-note 102, in which the same learned Judge (Holmes, C.J.) is reported to have said: 'The successor to Ballon's' (the mortgagor's) title in the hot field land '(the land last sold and sold free of encumbrances)' in like manner succeeded to the benefit of the agreement, '(by which the prior purchaser of another parcel of the land assumed the whole mortgaged.' Though succession is herein mentioned it would seem that the Court did not intend to put the purchaser in the shoes of the mortgagor judging from the extract we have given from the judgment in the later case.
5. The difference between the two cases was that in the later case the mortgagor did not convey the parcel last sold free of encumbrances although that 1st purchaser had assumed the whole mortgage, and the Chief Justice deals with the distinction as follows:
6. 'In the present case Pearson v. Bailey 177 Mass. 318...the mortgagor conveyed his other lot subject to the mortgage. He did not seem fit to avail himself of the estoppel against the defendant...in order to enhance the consideration which he received, by conveying the land as encumbered. It follows that the plaintiff cannot claim the benefit, of an estoppel of the defendant as against the mortgagor when it is not necessary to give it to her in order to preserve any of the mortgagor's right.' From this it is clear that in the opinion of the Court the benefit of the covenant did not pass with the title, to the mortgagor's assignee, but might be accorded to the assignee if the Court should find it necessary in order to make effectual and preserve any rights of the mortgagor.
7. Now, Mr. Srinivasa Aiyangar in asking us to apply the rule laid down in Jones on Mortgages, did not, if we understood him aright, base his request on the ground that the benefit of the covenant ought to be held to pass to the plaintiff with his title, and it is not clear to us that he could hope to succeed on this ground in a case like the present where it has not been ascertained whether the sale to the plaintiff was before or after the sales containing the covenant in question and whether the plaintiff purchased subject to the mortgage.
8. If the case be put on the other ground the plaintiff must equally, in our opinion, fail. The Subordinate Judge finds that the plaintiff must be taken to have purchased subject to the mortgage, and if that is so, he cannot claim the benefit of the agreement between the 3rd defendant and the mortgagors because to quote again the decision in Pearson v. Bailey 177 Mass. 318 it is not necessary to give it to him in order to preserve any of the mortgagor's rights. The mortgagors did not care to ask the plaintiff to pay the price of the land calculated on the footing that the mortgage money would be reduced by Rs. 1,200 and the liability in the land would be reduced to the same extent. The plaintiff cannot, therefore, claim the benefit of a right in them to deal with the property as they have not attempted to deal with it. This seems to be the effect of the decision to which Mr. Srinivasa Aiyangar invited our attention and it does not in the circumstances help him.
9. Nor can he succeed on the ground that We have here a suit for contribution in which all the parties, the mortgagors included, are before the Court; and we can, therefore, without leaving the plaintiff to a suit against the mortgagors and the mortgagors to a suit against the purchaser-defendants, decree against the purchaser defendants or the mortgagors or both for payment of the amount which, in our opinion, the plaintiff ought, as the final result of all possible litigation, to receive.
10. Here again the plaintiff is met with the finding that his purchase was subject to the mortgage. He has paid for the equity of redemption of the land purchased by him, and he has no equity, having paid nothing more to demand from the other purchasers any portion of that share of the mortgage debt for which his lands are liable.
11. The decree of the Subordinate Judge, therefore, seems to be right except upon the question of valuation. As the parties seemed to be agreed that whatever changes have occurred in the value of the land since the date of the mortgage, have only affected all the mortgaged lands it does not matter much what date is chosen for the valuation, provided that the same date be chosen for all; but the Subordinate Judge has valued the defendant's lands as at the date of the sales (16th April 1892) and the plaintiff's lands as at the date of the trial. This is clearly wrong and we must have a re-valuation. The date of the sales will be a convenient date to choose because the value of the defendant's land on that date has already been determined, and it remains to determine that of the plaintiff's land.
12. The necessary finding will be called for within 6 weeks and 7 days will be allowed for filing the objections.