W. Comer Petheram., C.J. and Wilson, J.
1. This suit has been brought to have it declared that two mortgages, dated the 29th of November 1882 and the 14th May 1884, in favour of the Plaintiff, have priority over a mortgage, dated 3rd of January 1884, in favour of the defendant, Bindobashinee Dossee, and to realize such two mortgages by bringing the mortgaged property to sale.
2. The facts are as follows: On the 29th of November 1882, Herembo Chunder Holdar, one of the defendants, mortgaged his one-third share of a house in Calcutta and a garden in the 24-Pergunnahs to the plaintiff to secure Rs. 1,000 and interest at 12 per cent.
3. On the 3rd of January 1884, Herembo Chunder Hoidar mortgaged his one-third share of the Calcutta house to the defendant Bindobashinee Dossee to secure Rs. 1,000, with interest at 18 per cent.
4. On the 14th of May 1884 the defendants, Herembo Chunder Holdar, Surut Chunder Holdar, and Benayak Chunder Holdar, mortgaged the whole sixteen annas of the two properties, included in the mortgage of the 29th November 1882, to the plaintiff, to secure Rs. 3,400 and interest at 18 per cent.
5. This last mortgage recites the mortgage of the 29th November 1882, and a further loan by the plaintiff to Herembo Chunder Holdar of Rs. 100, and proceeds, 'Now in order to liquidate the said debt, and on account of other necessities of ours, we three brothers do this day mortgage to you whatever right, title and interest we three brothers have in the said two properties and take the loan of Rs. 3,400; out of this money we have also liquidated the said debt, therefore, for interest of the said money, we will pay at the rate of 1-8 per mensem, and within 12 months from this day's date, we will repay the whole amount in full, principal as well as interest.'
6. Upon these facts, Mr. Justice Trevelyan has dismissed the suit altogether, holding that by the transaction of May 24th, 1884, the debt of November 29th, 1882, was paid off, and the security created by the deed of that date satisfied and cancelled. It has been argued before us that, looking at the real nature of the transaction, it did not amount to payment of the original debt, but was in fact a further advance and a fresh security, and that even if the effect of the transaction was that the original debt was paid, that did not necessarily destroy the security, the real test being what must the plaintiff be presumed to have intended to do under the circumstances if he had known all the facts.
7. It was also contended that if the defendants' contention was correct, the suit should not have been dismissed, as the plaintiff must be entitled, in any case, to some relief in the suit. In our opinion, all these arguments are valid and must be given effect to, and we are unable to agree with Mr. Justice Trevelyan in the conclusion at which he has arrived.
8. Looking at the construction of the deed of May 1884, we do not think the transaction amounted to payment of the original debt; but looking at what was done in fact, and not mere words, we think that it was in reality a fresh advance upon fresh security being given for both the old debt and the fresh advance, and upon a fresh arrangement being made as to interest, but that the old security for the old debt remained untouched. Even if this were not so, and the old debt was paid by the new transaction, the cases of Phillips v. Gulteridqe 3 De G. and J., 531, Adams v. Angell I.R. 5 Ch. D. 634, Gokaldas Gopaldas v. Puranmal Premsukdas I.L.R. 10 Cal. 1035, and Golnck Nath Misser v. Lalla Prem Lal I.L.R. 3 Cal. 307 show that that would not necessarily destroy the security; but that if there was nothing to show a contrary intention, the creditor must be presumed to have intended to keep the security alive for his own protection. We can see nothing in this case to indicate a contrary intention on his part, and we think that the plaintiff here must be presumed to have had such an intention, and that in either view the security of November 29th, 1882, is still subsisting, and the plaintiff is entitled to a declaration that notwithstanding what has taken place, his mortgage of November 29th, 1882, has priority over that of January 3rd, 1884, in favour of the defendant Bindobashinee Dossee.
9. An account will be taken of what is due for principal and interest under the mortgage of November 29th, 1882, and of what is due for principal and interest under the mortgage of May 14th, 1884, and it will be declared that the amount due under the first mortgage is a first charge upon the property mentioned in that mortgage, and that the amount due on the mortgage of May the 14th, 1884, is a charge upon the whole of the property mentioned in that mortgage, subject to a charge in favour of the defendant Bindobashinee Dossee for the amount due for principal and interest under her mortgage upon Herembo Chunder Holdar's one-third share of the house in Calcutta, and that the plaintiff do sell the properties not included in such last mentioned mortgage first.
10. In taking the accounts as between the mortgagors and the mortgagee, the amount found to he due under the mortgage of November 29th, 1882, minus the interest from November 29th, 1882, and May 14th, 188i, must be deducted from the amount found to be due under the mortgage of that date in order to arrive at the sum now due from the mortgagors, the Holdars, to the plaintiff', and for which he is entitled to bring the mortgaged properties to sale.
11. The plaintiff will be entitled to add his costs to his mortgage and, under the circumstances of the case, the costs of the defendant, Bindobashinee Dossee, should also be added to her mortgage.