Madras High Court
A. Rama Rao vs Mandachalugai And Ors. on 18 February, 1918
JUDGMENT
1. It is first contended that the right of a prior mortgagee obtained by subrogation cannot be enforced by suit, but can only be used as a defence agaitst subsequent encumbrances, and reliance is placed on certain observations in Arumugusundarn v. Narasimha Iyer 29 Ind. Cas. 916 : 29 M.L.J. 583 : 2 L.W. 542 : (1915) M.W.N. 397 : 18 M.L.T. 110 quoted with approval in Rajah of Kalahasti v. Prayag Dossjee 35 Ind. Cas. 224 : (1916) 2 M.W.N. 92 : 30 M.L.J. 391 In the present case, however, the right was used as a shield and plaintiff's mortgage right was recognised by the subsequent mortgagee when the property was brought to sale in execution of his decree. The right of subrogation is an equitable right and in the present case, being a mere simple mortgage right, it can now only be enforced against the auction-purchaser by suit. To recognise an equitable right and then refuse the means of enforcing it would in effect result in refusing the equity.
2. We cannot, therefore, accept the contention that such right cannot in any event be enforced by suit and we are supported in this view by the opinion of the Allahabad High Court in Our Narain v. Shadi Lal 12 Ind. Cas. 607 : 34 A, 102 : 8 A.L.J. 1289 This objection must, therefore, fail.
3. It is next contended that plaintiff has obtained no right of subrogation because he paid off the prior mortgage out of the purchase money, and we have been referred to numerous cases in support of this contention. The principle that has been applied in all these cases is the same, and each case has been decided on the question of whether it was or was not the intention of the purchaser to keep the mortgage alive, and the presumption is in favour of its being so kept when it is to the purchaser's interest to do so. In this case the question of intention was not raised in the lower Courts. As plaintiffs' right had been recognised by the puisne mortgagee, we cannot allow this question of fact to be re-opened, especially as the available evidence is against appellant.
4. The appeal is dismissed with costs.