1. The facts are not in dispute. Plaintiff's mortgage, Exhibit A, is dated 18th May 1911. The 3rd defendant's mortgage, to which priority has been given by the Subordinate Judge, was in the year 1907. Plaintiff paid off an earlier mortgage, Exhibit G of 1908. Exhibit G refers to three earlier mortgages, Exhibits C, D and E, as having been discharged by the money received under Exhibit G. There is no dispute that these three mortgages were earlier in date than the 3rd defendant's mortgage. The question under these circumstances is whether the plaintiff is entitled to stand in the shoes of the mortgagees under Exhibits G, C, D and E or is he to be postponed to the 3rd defendant's mortgage. The lower Appellate Court held that, as the plaintiff did not directly pay off Exhibit G, but as the money was paid by the mortgagor to the mortgagee under Exhibit G, there was no question of subrogation. He is clearly wrong in this view. It is not the hand that pays the money that has to be taken into account but it is the intention of the parties, whether by paying the money the earlier mortgage was intended to be kept alive. That has been distinctly ruled by the Judicial Committee in Dlnobundhu Shaw Chowdhry v. Jagmaya Dasi 29 C.P 154 : 12 M.L.J. 73 : 4 Bom. L.R. 238 : 29 I.A 9 : 6 C.W.N. 209 . In this Court in Swaminatha Pillai v. Krishna Iyer 28 Ind. Cas. 966 : 28 M.L.J. 484 the learned Judges have held that even if there is a partial discharge of the earlier mortgage, to that extent the principle of subrogation would apply. As to how far this decision is consistent with Hanumanthniyan v. Meenatchi Naidu 12 Ind. Cas. 412 : 22 L.J. 12 : 10 M.L.T. 380 : (1918) M.W.N. 158 it is not necessary in this case to consider, because in the present case the entire mortgage, Exhibit G, was paid off by theexecution of Exhibit A.
2. For the respondent it was contended that the mere payment of money would not by itself give rise to the principle of subrogation. This argument would be correct if the payment were voluntary, but if there is a contract between the mortgagor and the mortgagee that the mortgagee should pay off the earlier mortgage and if in pursuance of that contract money is paid, the case will come under the principle mentioned in Swaminatha Pillai v. Krishna Iyer 28 Ind. Cas. 966 : 28 M.L.J. 484 Dinobhundhu Shaw Chowdhry v. Jagmaya Dasi 29 C.P 154 : 12 M.L.J. 73 : 4 Bom. L.R. 238 : 29 I.A 9 : 6 C.W.N. 209; Narayana Kutti Goundan v. Pechiammal 15 Ind. Cas. 206 : 22 M.L.J. 364 : 11 M.L.T. 174 : (1912) M.W.N. 353 and Yellapaddi Mahalakshamarnmal v. Sriman Madhva Siddhantha Oonahini Nidhi 11 Ind. Cas. 865 : 10 M.L.T. 169 : 21 M.L.J. 811 : (1912) M.W.N. 24 relied on for the respondent only decided that a volunteer paying money will not be entitled to the privilege of subrogation, That is not the case which we have to consider on the present occasion. So far, therefore, as Exhibit G is concerned, the plaintiff is entitled to stand in the shoes of the mortgagee. Moreover, in this case we have the fact that Exhibit G was delivered to the plaintiff and there is an endorsement on the back of Exhibit G stating that the plaintiff paid the money. All these clearly indicate that the plaintiff intended to keep the earlier mortgage alive for his benefit.
3. The further question is whether plaintiff is entitled to be subrogated to the position of the mortgagees who were paid off by the execution of Exhibit G. As we have already stated, Exhibits C, D and E were mortgages which were satisfied by means of money borrowed under Exhibit G. There is direct authority in Seetharama v. Venkatakrishna 16 M.K 94 wherein it was held that a mortgagee who pays off an earlier mortgage is net only entitled to the rights of that mortgagee but also to the rights of the mortgagees who were paid off by that mortgage amount. Further, we have in this case the fact deposed to that the mortgagee under Exhibit G got the title-deeds Exhibits G, D and E and saw that the money which he advanced was utilised for the purpose of paying those three mortgages. These are clear indications that the mortgagee under Exhibit G intended to keep alive the earlier mortgages Exhibits C, D and E for his benefit.
4. We have come to the conclusion that the plaintiff is entitled to priority over the 3rd defendant's mortgage. As it is found that only Rs. 180 was applied towards the payment of the earlier mortgages, priority will be restricted to that amount with interest thereon. The decree will be modified as above indicated. The appellant is entitled to his costs as against 3rd defendant-respondent.