1. This second appeal arises out of a suit on a mortgage bond, dated the 21st December 1900, and the question which has to be decided is one of subrogation. It appears that one Bhagwat Pershad Singh mortgaged his two anna share in Mouzah Pain Kalan to one Narsingh Singh by a bond early in 1886. Narsingh brought a suit on this bond and obtained a decree on the 21st June 1899 for Rs. 850, Bhagwat Pershad's share was put up for sale in execution and after several adjournments the decretal amount was paid off by the plaintiff's husband, the pleader and old friend of the judgment-debtor, by means of a mortgage bond for Rs. 850 to his wife Tara Sundari. The bond recites the necessity for paying off the decree and the fact of its payment, it refers to the mortgage of Narsingh and also specifically mentions one of the three mesne mortgages which the Court of first instance has postponed to plaintiff's mortgage holding that she has the right of subrogation.
2. The learned Judge in the lower appellate Court has sot aside this part of the Sub-Judge's judgment on two grounds: first that there was no agreement or intention to keep alive Narsingh's lien and secondly that Tara Sundari was a mere volunteer.
3. We have already in a judgment delivered this day in Prayag Narain Kafri v. Chedi Rai l4 C.W.N. 1093, note : 7 Ind. Cas. 979 pointed out to this same learned Judge that the principle of subrogation is one based on a presumption of intention which may be supported by circumstances or by evidence of assignment or agreement or both. In this case one mortgagee at least is expressly referred to in the plaintiff's bond and this is the strongest evidence of intention to keep it alive. As regards the other two there is a false statement by the mortgagors that there are no other mesne in cumbrances and the presumption, therefore, enures to her benefit, as regards mortgages she knew nothing about; since her plain intention was to advance money on property free of encumbrance.
4. The Judge thinks because there was an ample margin of security, the property being valued at Rs. 4,000 and because the rate of interest given to the lady was double that of Narsingh's bond, therefore, she could not have contemplated keeping that bond alive. The margin of security has nothing to do with it since a succession of undisclosed mortgages might soon melt away the margin and the increased interest goes to show that the security was not considered so good as when Narsingh took his bond.
5. Then there is the positive testimony of the lady's husband, who is not discredited by either Court, who swears that both he and his wife intended to keep alive Narsingh's security and that the mortgagors agreed that it should enure for the benefit of his wife. The Judge seems to think that he can't plead both grounds for subrogation and that he, so to speak, falls between. two stools.
6. This we cannot understand. Subrogation by intention gives him an equitable claim, subrogation by agreement a legal claim. Surely if he has both he is in a doubly strong position.
7. We think that this is a particularly strong case for subrogation both on presumption, circumstances and positive evidence.
8. Then as regards. Sri Kumar or rather his wife being a volunteer we cannot agree with the learned Judge. The lady took the mortgage purely for the purpose of satisfying the decree against her friend and saving the property. The recitals in the decree show that the transaction was purely directed to that end. She is not a person who paid the debt without any implied assignment or agreement. The circumstances lead to a strong presumption of agreement.
9. The case of Gurdeo Singh v. Chandrikah Singh 5 C.L.J. 611 : 36 C. 193 : 1 Ind. 912, was one where the circumstances were very peculiar and the real ratio decidendi in that case was the fact that only the interest of the prior mortgage had been paid off from time to time. In the still more recent case of Bisseswar Prasad v. Lala Sarnam Singh 6 C.L.J. 134, the same two learned Judges laid down that the doctrine of subrogation is a doctrine of equity. It does not depend on privity of contract, express or implied. It is founded on the facts and circumstances of each particular case and on the principles of natural justice.
10. Instances are there given where the doctrine will be applied: and among them, in general, wherever any person other than a mere volunteer pays a debt or demand, which in equity or good conscience should have been satisfied by another, or where the liability of one person is discharged out of a fund belonging to another. Such a case is the present. One of us was a party to both these rulings and we have had the advantage of consulting the learned Judge who delivered the judgment of the Court in both cases and there can be no possible doubt that the general principles laid down in Bisseswar Prasad v. Lala Sarnam Singh 6 C.L.J. 134, which are only a logical expansion of the dicta of the Judicial Committee in Gokaldas Gopaldas v. Puranmal Premsukhdas 10 C. 1035 : 11 I.A. 123, apply with full force to the present case, while the exceptional circumstances which gave rise to the decision in Gurdeo Singh's Case 5 C.L.J. 611 : 36 C. 193 : 1 Ind. 912 have no application to this case. The very words cited by the learned Judge from p. 633 of that ruling show how clearly it is to be distinguished from this case and similar cases such as that in Bisseswar Prasad v. Lala Sarnam Singh 6 C.L.J. 134. As regards limitation on which the Judge considers it unnecessary to decide as he is against the plaintiff on the other-points we need merely point out that the fact that a decree was passed on Narsingh's mortgage in 1399 shows that it was not barred by limitation and the plaintiff's right of subrogation cannot, therefore, be barred.
11. For all these reasons we set aside the judgment and decree of the learned Judge in the lower appellate Court and direct that the judgment and decree of the Court of first instance be restored with costs in appeal in both appellate Courts to the plaintiff on what she has gained.