1. This is an appeal preferred by defendants Nos. 2 and 3 against the judgment of the Subordinate Judge in favour of the plaintiff.
2. The action was brought on a mortgage executed on July 17th, 1900, by defendant No. 1, in favour of the plaintiff. The defendants-appellants are mortgagees who obtained a decree on a mortgage, dated November 1894, against defendant No. 1.
3. The question in controversy between the parties relates to the priority in respect of their charges.
4. The mortgages which are material to the present appeal are three in number. The first is dated February 1894. Under it the defendant No. 1 and a brother of his who is not a party to the present action executed a mortgage of 16 annas of Aslampur in favour of the plaintiff to secure a sum of Rs. 7,000. The second mortgage in point of date was executed in November 1894. Under it the defendant and his brother granted a mortgage of 16 annas of Aslampur in favour of the defendants Nos. 2 and 3 to secure a sum advanced to them. The next mortgage is the one on which the present action is brought, that is dated, as we have said, 17th July 1900. It was expressed to be granted in consideration of the debt due under the mortgage of February 1894 and also of a further advance. By it the defendant No. 1 mortgaged an eight-annas share of Aslampur and also an eight-annas share of Mukhbulpur in favour of the plaintiff in the present suit, the result of the mortgage transaction being that the plaintiff had a mortgage over the entire property of Aslampur from the defendant and his brother granted in February 1894. He also had a mortgage over 8 annas of Aslampur and 8 annas of Mukhbulpur granted by the defendant No. 1, only in July 1900, while' the appellants held a mortgage of November 1894 over the whole 16 annas of Aslampur from the defendant and. his brother. In April 1901, the appellants brought a suit on their mortgage of November 1894 and made the present plaintiff a party on the footing that he had acquired a subsequent interest in the mortgaged property. The present plaintiff did not defend that suit, the appellants obtained a decree and the property was sold in execution of that decree and bought in by the appellants. In July 1905, the plaintiff-respondent brought the present suit against the defendant No. 1, asking for a mortgage decree on the bond of July 1900 on the allegation that the bond though subsequent in date to the bond on which the appellants had obtained their decree nevertheless was entitled to priority over it inasmuch as it kept alive the lien created by the bond of February 1894. The learned Judge has given the plaintiff a decree. Against that, the defendants appeal.
5. The first objection they take is that the plaintiff having been made a party to the suit of 1901 ought to have appeared in that suit and disclosed his mortgage of February 1894. It is argued that not having done this, he has lost the benefit of that security.
6. We are unable to agree that there was any duty on him to set up a prior mortgage of November 1894. The case which the learned Vakil for the appellant has cited does not seem to us to support the proposition. He relies on the case of Sri Gopal v. Pirthi Singh 24 A. 429 (P.C.) : 29 I. A. 118. That was a case in which there were 5 mortgages, dated respectively July 1871, August 1872, February 1874, July 1874 and August 1876. Of these, three prior to that of 1876 were in favour of a man named Ishur Das. An action was brought by the representatives of the mortgagee under the last mortgage namely that of August 1876, claiming priority over all the earlier mortgages on the ground that the money was borrowed to pay off encumbrances created before 1871. They failed in this contention but got a decree entitling them to sell the property free from encumbrances after paying off inter alia the bond of 1871, Ishur's representatives did not set up the deed of 1874. They afterwards brought a suit on that mortgage and it was held that they had lost their priority by their failure to set it out in their action in which the issue was whether the mortgage of August 1876 had a priority over the mortgages created between that year and 1871. That was the issue and Ishur's representatives ought to have set up their claim with respect to the deed of 1874 and not having done so, lost their priority. But that case does not lay down that where a puisne mortgagee is suing a mortgagor, the prior mortgagee is bound to come in and allege his prior mortgage. There were other cases' also relied upon by the learned Vakil for the appellant particularly, amongst others, the case of Gopal Lal v. Benarasi Pershad Chowdhury 31 C. 428 where the plaintiff alleged that a certain person was a subsequent mortgagee and that the plaintiff was entitled to sell clear of encumbrances. He obtained a decree and permission that there should be a sale failing redemption. The person whom he had declared as a subsequent mortgagee, subsequently set up a prior mortgage, and sued upon it. There it was held that the prior mortgagee ought to have set up his mortgage in the suit in which it was alleged that he was a subsequent mortgagee and the judgment went on the ground that the plaintiff claimed to sell the property free from encumbrances and, therefore, was claiming a right which affected the rights of the prior mortgagee and if the prior mortgagee desired to dispute his right to sell the property free from encumbrances, he was bound to appear to set up his mortgage and resist it.
7. In the present case the defendants-appellants merely asked for a decree on their, mortgage; they did not allege that they desired to redeem any earlier mortgage or to sell the property free from any prior incumbrance. There was no need, therefore, for the prior incumbrancer to come in and raise any case so far as the incumbrance of 1894 was concerned. The first objection, we think, therefore, fails.
8. The second objection soems to us to have much more weight in it. The appellants argue that if Babu Singh the mortgagee under the mortgages of February 1894 and July 1900 desired to allege that the mortgage of 1900 had priority over the mortgage of November 1894, because it kept alive the lien created in 1894, he was bound to appear in the action brought by the appellants and dispute their allegation that his right in the mortgaged property was aright subsequent to the appellants' mortgage. In their plaint they had made him a party and they had him a party on the ground that he had some right in the property mortgaged in the bond acquired after the bond, the basis of the claim: Therefore, he was to meet their objections by being impleaded as defendants.' The mofussil pleading is often inartistic; it appears to us to express the contention the defendant-appellants desired to make with reference to the mortgage of 1900, namely, that it was a mortgage over which they claimed priority because their mortgage was prior in date. Now it seems to us that if the present plaintiff desired to set up a case that his mortgage though later in date was entitled to priority over the earlier mortgage of the defendant-appellants, he was bound to raise that case in the action they brought. There would then have been a substantial issue to be tried. On the one side, the defendant-appellants would have contended that his mortgage being later in time was subject to the earlier charge in favour of the defendant-appellants, on the other side he would have contended that it had priority because it kept alive the earlier charge of February 1894. The question whether it did so, is one which ought to have been deter mined in that suit, and we feel considerable-difficulty in seeing how the same issue, can. be raised in the present proceeding.
9. The defendant-appellants in their suit of 1901 asked for a sale under their mortgage. That is a sale subject to prior, but free from; subsequent encumbrances but, of course, subject to the liability of being paid off by a1 subsequent encumbrancer.
10. The mortgage of 1900 was a subsequenti-encumbrance : if the present plaintiff desired to allege that though subsequent, it never-the less was entitled to priority he was, we think, bound to allege that contention in the suit in which he was alleged to be a subsequent mortgagee.
11. In our opinion he is now precluded from, setting up the case which he ought to have set up in that suit.
12. Then what is his position? As a puisne mortgagee he was entitled to redeem.
13. Had the decree in the suit of 1901 been properly drawn it would have limited a time within which the present plaintiff was to exercise that power and so save the mortgaged property from sale, but the decree contains no mention of any parties except the mortgagors.
14. Nothing, therefore, appears to have been ' done which has the effect of taking away the right which the plaintiff had of redeeming the earlier mortgage of 1894. The conclusion we come to is that the plaintiff was not entitled to the decree he obtained in the Court of first instance on the footing that he was not precluded from asserting that his mortgage of 1900 was prior to that of the defendant-appellants, but that his right to a decree on his mortgage is subject to his redeeming the mortgage of the defendant-appellants.
15. In this view of the case it becomes unnecessary to decide the other question argued i. e., whether the mortgage of 1900 in fact kept alive the earlier mortgage of 1894.
16. For these reasons the appeal must be -allowed and the decree made by the learned Sub-Judge must be modified. There must; be a declaration that the plaintiff is entitled to redeem the appellants' mortgage of November 1894. There must be an account of what is due to them under that mortgage.
17. The plaintiff to pay that amount within 6 months, in default the action to be dismissed.
18. If the plaintiff shall redeem, then he will be entitled to the usual decree on his mortgage.