1. The facts out of which this appeal arises may be stated as follows: One Ramanujulu Naidu died on 31st February 1918 having executed his last will and testament on the preceding day, appointing his wife as the sole executrix and leaving him surviving the said wife Sundararajamma and three sons: Govindarajulu and two others. Under the will he gave a life interest to his widow, but she was given liberty to sell the house and invest the proceeds in three different houses and continue to possess a life interest in the three substituted houses and after her death the houses should belong to the three sons. Probate was obtained of this will on 13th September 1918. Govindarajulu the eldest son filed C. S. No. 628 of 1921 to recover his one third share of the property, which consisted only of a house, on the ground that it was ancestral property and that the testator had no power of testamentary disposition. That suit was disposed of by Coutts-Trotter, J., as he then was. He held that the property was the self-acquired property of Ramanujulu and that the plaintiff had no present right to possession. He therefore dismissed the suit. There was a counterclaim by Sundararajamma in that suit. This counter-claim was decreed. It amounted to Rupees 3,100. On 3rd February 1922 Govindarajulu executed a release deed by which he released all his interest in the property of his mother, the consideration being the decree against him for the counter-claim. By that time he was leading a wild and dissolute life and was contracting debts On 17th December 1921 Sundararajamma borrowed a sum of Rs. 1,500 from one J. Narasinga Rao and executed a deed of mortgage over the house. In January 1926 the minor son of Govindarajulu filed:O. S. No. 120 of 1926 in the City Civil Court, Madras, for the recovery of his one-third share by partition and for a declaration that the mortgage in favour of Narasinga Rao was not binding on the estate. In that plaint (Ex. C-2) Janarthanam, the minor son, alleged as follows:

Respondent 1 in view of the wasteful habits of respondent 2 and as a family settlement of all disputes and in substitution of respondent 1's duty of purchasing three houses agreed one year ago to partition the house and allot one-third share in the suit house itself to petitioner, one-third share to respondent 3 and one-third share to respondent 4, to which all consented.

2. Respondents 3 and 4 referred to above are the other two sons of Sundararajamma, respondent 1. She filed a written statement Ex. C-3 in which she stated:

This defendant states that though she is solely entitled to the property under the will and though defendant 2 has no right, still in view of the peace of the family, she agreed to give and convey a one-third share to the plaintiff and his next friend and agreed to convey similarly the remaining two-third shares to defendants 3 and 4 each one-third share.

3. No issues were framed in the case and the suit came on for final disposal. Ex. C-1 is the judgment of the City Civil Judge. In para. 7 he says:

The only dispute in this case relates to the genuineness or otherwise of the mortgage passed by defendant 1 in favour of defendant 5.

4. He ultimately found that the mortgage to Narasinga Rao was binding on the estate, i.e., on respondent 1 and her sons to the extent of Rs. 1,020. He concludes his judgment in para. 11 where he says:

Subject to this burden plaintiff and his two uncles defendants 3 and 4 will be' declared entitled to one-third share each in the family property. There will be division by metes and bounds and each sharer will take his share subject to one-third share of the debt binding on the estate.... Further hearing 28th September 1926.

5. What was meant by the further hearing was apparently that some steps should be taken to get a commissioner appointed for the division of the house into three shares and other consequential steps. When the case came on on 28th September 1926, the plaintiff did not appear and the order passed by the learned Judge was this. "No steps. Dismissed." It is practically common ground between all the parties that the main object of that suit was to get rid of the debt of Narasinga Rao, if such a thing was possible, and having failed in their main object the plaintiff did not care to continue the claim for partition. Some time after the disposal of that suit the present plaintiff was approached for a loan by Sundararajamma and the second and third sons. A broker acted on their behalf and Mr. Veeraraghavalu Chetty, an advocate of this Court, examined the title on behalf of the plaintiff. He prepared a draft of the mortgage and sent it to Mr. Gopala Menon, another advocate who was working on behalf of Sundararajamma and her two sons. He approved of the draft and sent it back to Mr. Veeraraghavalu Chetty. The draft recites the earlier history as set forth by me. It says that:

There was a family settlement between the members thereof by which Sundararajamma consented to surrender her life interest in the house and ground in favour of the mortgagors (her two sons and grandson) and that it was agreed between them that they should enjoy in three equal shares the said house and ground subject to payment of all lawful debts.

6. It also mentions that on the strength of the said family arrangement Janarthana Naidu filed O. S. No. 120 of 1926 on the file of the City Civil Court for partition and for a declaration concerning the debts, that a decree was passed in that suit declaring that Narasinga Rao's debt was binding on the estate to the extent of Rs. 1,020, and that all the mortgagors should be equally entitled to one-third share each in the said house. It then proceeds to refer to some small cause decree of Narasinga Rao. Mr. Gopala Menon, who was then acting for Sundararajamma, did not object to these recitals, but he approved of the draft and sent it back to Mr. Veeraraghavalu Chetty. Some time after this Sundararajamma backed out of the transaction. The evidence shows that originally it was intended that the loan should be of Rs. 3,000. Rs. 2,700 were required to pay off the debts of the family and for other expenses and Sundararajamma wanted to take the remaining Rs. 300. The sons objected to this. They said that it would be enough to borrow only Rs. 2,700. Thereupon Sundararajamma would not join in the transaction. The result was that an actual mortgage deed Ex. A was executed on 4th May 1927 for Rs. 2,700 only by her grandson and two sons. On 1st June 1927 a notice (Ex. B-l) was issued by Sundararajamma questioning the validity of the mortgage and warning the mortgagee that it does not bind her. The present suit was filed by the mortgagee on 19th July 1929 to recover his debt by sale of the property. The mortgagors are defendants 1 to 3 and Sundararajamma was made defendant 4. In para. 10 of the plaint the plaintiff alleges that he claimed to be subrogated to the rights of Narasinga Rao, as the amount of his mortgage was borrowed to pay the amount borrowed from him. In para. 11 he alleges that defendant 4 was a party to the suit in City Civil Court wherein it was declared and decreed that "defendants 1 to 3 herein are each entitled to a one-third share." He also alleges that she acquiesced in the mortgage by defendants 1 to 3 and is estopped from questioning the same. The learned trial Judge, our brother Waller, J., found that:

defendant 4 led the plaintiff to believe that the other defendants were entitled to mortgage and lend to them on that basis and therefore it is not open to her to say now that they were not so entitled. No doubt she did send the mortgagee a notice denying their right, but that was after she must have known that the money had been advanced.

7. He also observed that she came into Court at the instance of her sons, and he deerred the suit. Defendant 4 appeals. The substantial question in appeal is whether she has got any subsisting interest in the property. Undoubtedly on a construction of the will she had originally a life interest in the property and the sons had only a vested remainder after her death. But the question is what is the effect of the subsequent transaction. First, we have got the judgment of the City Civil Court in which it was alleged by the plaintiff therein that there was a family arrangement which was not denied by her. It is true that there is no issue about this family arrangement or a decision on it. There could be no issue or decision because, when both parties have admitted it there was no contest about it. But it is clear that the decree was passed on the footing of a family arrangement admitted by all the parties. In such cases res judicata by reason of a prior decision extends not merely to the actual decision or finding in the case but to the common basis or facts accepted by both parties which are incorporated and made the foundation of the judgment and decree in the case.

8. It has been contended by Mr. Venkatachari, the learned advocate for the appellants, that the judgment in that case does not bind defendant 4 as res judicata because the City CivilCourt was not competent to try the present suit. The value of the present suit being Rs. 3,865, the City CivilCourt had no jurisdiction to try the suit. He relied upon the well-known cases in Run Bahadur Singh v. Luchi Koer [1885] 11 Cal. 301, Gokul Mandar v. Pudmanand Singh [1902] 29 Cal. 707, Giriya Chettiar v. Sabapathy Mudaliar [1906] 29 Mad. 65, and other cases. The observations in Gokul Mandar v. Pudmanand Singh [1902] 29 Cal. 707, were made with reference to the facts of that case. In that case the first Court was a Revenue Court which could not try the latter case which was before the civil Court. The incompetency of the first Court to try the second suit was not with reference to the value of the subject-matter but with reference to the nature of the tribunal. This distinction was pointed out in the decision Ranganatham Chetty v. Lakshmi ammal [1913] 21 I.C. 15, by White, C. J. It was there held that, where the latter suit relates not only to the subject-matter of the first suit but to other matters and the Court which tried the first suit would be incompetent to try the subsequent suit only by reason of this combination, the earlier decision would still be res judicata. This was followed by another Bench of this Court in Thekkaman-nengath Raman v. Kakkasseri Pazhiyot Manakkal Karnavan [1915] 27 I.C. 989, and both these decisions were followed by Curgenven, J., in Patrachariar v. Alamelumangai Ammal, A. I. R. 1927 Mad. 273.

9. We think therefore that the decree in the City Civil Court makes the present claim of defendant 4 res judicata. But apart from this we think that defendant 4 is also estopped from putting forward this claim. In the plaint in the City Civil Court there is an allegation that there was a family arrangement. In her written statement she expressly admitted the arrangement as a matter of peaceful settlement and because of this admission the matter ended in a decree declaring the grandson and two sons entitled to one-third each. At the time of the negotiations for the suit mortgage this preliminary decree was shown to Mr. Veeraraghavalu Chetty who acted for the plaintiff. It is admitted that the final decree was not brought and shown to him, but it was stated to him according to his evidence that the final partition was postponed, and it was upon this statement that the draft Ex. D was prepared. The draft expressly states that by the surrender of Sundararajamma the grandson and the two sons became entitled to one-third share each. This draft was not objected to by Mr. Gopala Menon who was then acting on behalf of the mortgagors. The reason why she finally resiled out of the transaction was not that she did not accede to the title of her grandson and sons but a different reason, namely, that she could not get Rs. 300 which she expected out of the transaction. Having led the plaintiff and his legal adviser to believe that the title of the grandson and the two sons was perfect, she cannot after the transaction was completed, question their title. She is therefore estopped not only by her conduct in filing written statement to the plaint before the City Civil Court but also by her conduct in regard to the negotiations relating to the mortgage. Mr. Venkatachari contended that the written statement only stated that she agreed to surrender and that, unless there is a registered document, the title of the grandson and the two sons to present interest in the three shares of the houses is not complete. But this want of registration, assuming it is necessary, is cured by the decree of the City Civil Court. The decree declared them entitled to one-third share each and once the decree had made that declaration, registration, even if it was necessary, had become unnecessary.

10. Another point argued by the learned advocate for the appellant is that the suit was ultimately dismissed and therefore there was no decree that could be res judicata in a later litigation. But the only order we have got of the City Civil Judge is the order dated 28th September "No steps. Dismissed." It is not clear from this that the suit was dismissed. It was held by the Privy Council in Lachmi Narain v. Balmukund A.I.R.1924 P.C. 198, that after a preliminary decree in a partition suit was passed it is not competent to the Court to dismiss the suit subsequently. The preliminary decree can only be reversed on appeal and whatever default there may be in the subsequent stages of the suit, that preliminary decree itself cannot be vacated. The principle of this has been followed in various decisions of this Court, e.g., Perumal Pillai v, Perumal Chetty A.I.R. 1928 Mad. 914 and Lachmi Narayan v. Ramasaran A.I.R. 1925 Pat. 433. It is clear that the Court could not dismiss the suit entirely. But Mr. Venkatachari contends assuming that the Court had not the power, it did dismiss the suit and unless the order is reversed in appeal the wrong order still remains binding between the parties and he refers to Sreeramulu v. Nagabhushanam A.I.R. 1928 Mad. 963, in support of his contention. It may be that even a wrong judgment remains binding on the parties if not set aside, but in this case we must first see what the wrong judgment is. The order is simply "No steps. Dismissed." It is not clear that the suit was dismissed. If there is nothing standing in the way of our construing this order as being consonant with the rest of the proceedings, namely, as an order dismissing the further claim of the plaintiff for an equal division of the property by metes and bounds and for delivery of possession, we ought to do so. There is no reason why we should say that the City Civil Judge intended to dismiss even the plaintiff's claim for a declaration and to vacate the declaration which had already been made. On the language of the order, we find nothing to compel us to so construe the order. We therefore think that the declaration previously made in the preliminary decree stood, and whatever might have happened afterwards to the claim for actual possession, it has never been vacated. Therefore this objection fails.

11. There is a further ground of the plaintiff's claim on the principle of subrogation. It is unnecessary to discuss this for the appeal must fail on the above grounds already indicated.

12. There is one clerical mistake in the decree as drafted, which has to be corrected. The appellant, defendant 4, was not actually a party to the mortgage document and she cannot be personally liable. The only object of adding her in the suit was to make the whole property liable without any objection from her. The decree makes all the defendants personally liable. In para. 9 of the decree after the word "defendants" figures one and two must be inserted because defendant 3 is a minor and therefore he will not be personally liable, though any other property of his would be liable.

13. At one stage of this appeal the Official Assignee has intervened. It would seem that the eldest son Govindarajulu became insolvent and his property vested in the Official Assignee. The vesting order was made on 12th October 1923. It is stated that the release of February 1922 in favour of the mother was really made for the purpose of defrauding his creditors and it is said that he had some creditors even at that time. The Official Assignee was not a party to the suit. If he thinks that he ought to question the release by Govindarajalu of his interest which would strictly be one-third, he ought to take other steps for attacking that transaction. He was not a party to the suit and no materials were placed before the Court, and to allow this question to be raised now would be to embark into a new point on which we have no material. He was brought into the case at the instance of defendant 3. All that we find at present is that there was consideration for the release deed, namely, the amount of the counter-claim decreed against Govindarajulu in favour of Sundararajamma by Coutts-Trotter, J. It is contended that, in spite of there being this consideration, the release deed of February 1922 should be regarded as coming within the insolvency law. The vesting order was made in October 1923. The Official Assignee will therefore bear his own costs in this case.

14. The appeal will be dismissed with costs of respondent 1. The other respondents will bear their own costs.

15. (This appeal having been set down to be spoken to this day, the Court delivered the following:) JUDGMENT

16. The further proceedings in execution of the preliminary decree of the first Court will go on but so as to hold the sale on or after 15th January 1932.