This appeal arises out of a suit to enforce a mortgage-bond. That document bears date the 24th September, 1886. The Defendants-Appellants obtained a mortgage of a portion of the same properties as also of some other properties from the mortgagors on the 4th November, 1886, that is to say, on a date subsequent to that of the Plaintiff's mortgage. Under this document, it was stipulated between the parties that some earlier mortgages—earlier than the mortgage of the Plaintiff—should be paid off, and that the mortgage deeds should be made over to the Defendants-Appellants. Subsequently, these Defendants sued the mortgagors upon their mortgage security without making the Plaintiff a party Defendant, as they ought to have done, and, having obtained a decree, put up the properties hypothecated to them for sale. Thereupon, the Plaintiff intervened alleging that he had a mortgage of some of those properties given to him on the 24th September, 1886. The Court simply ordered, without any investigation whatsoever, that the Plaintiff's mortgage be notified at the time of sale. Accordingly, the properties were sold up with the said notification, and they were purchased by the Defendants-Appellants themselves. Thereafter, the present suit was brought in October 1898 for the purpose of enforcing the mortgage security of the 24th September, 1886, the Defendants to the suit being the mortgagors and the Appellants the mortgagees under the mortgage, dated the 4th November, 1886.

Both the Courts below have decreed the Plaintiff's suit. The District Judge, on appeal by the Defendants, addressing himself, among other matters, to the question of intention, namely, as to what the intention of the parties was when the mortgage of the 4th November, 1886 was executed—whether it was their intention to extinguish altogether the earlier mortgages, or keep them alive for the benefit of the mortgagee Defendants—observes as follows:—“The second contention is that, as the money advanced by the Appellants was devoted to paying off previous mortgages on this very property, the mortgagee is entitled to keep those liens alive for his own benefit. The pleader relies mainly for support of this contention on the decision of Dino Bandhu Shaw Chowdhury v. Nistarini Dasi. It is difficult for an officer of only my experience to understand how that decision is reconcilable with the provisions of sec. 80 of the Transfer of Property Act; but that decision merely allows a mortgagee who advances money to pay off certain specified mortgages to keep those liens alive for his own benefit against other specified encumbrances. But, in this case, it is the Appellants' case that, at the time of their mortgage, they knew nothing of the Plaintiff's mortgage. They cannot possibly, therefore, have intended to keep alive the liens of the former mortgages for their own benefit against the mortgage of the Plaintiff,” and so on. Now, looking at the section of the Transfer of Property Act to which the learned Judge refers, and upon which, as it seems to us, he mainly relies in support of the view that he adopts, it will appear that it does not really bear out the position which the learned Judge takes. That section runs as follows:—“No mortgagee paying off a prior mortgage whether with or without notice of an intermediate mortgage shall thereby acquire any priority in respect of his original security.” It would appear that what the Legislature means to say is that, by the mere payment of a prior mortgage, a subsequent mortgagee does not acquire for his subsequent mortgage any priority over any other mortgage. The section does not exclude the application of the principle which has been adopted in the case to which the learned Judge has referred, and some other earlier cases on the same point. One of the cases which, in this connection, may be very advantageously referred to is that of Gokaldas Gopaldas v. Puranmal Premsukhdas. In that case, the mortgagor's right, title and interest in certain immoveable properties which were subject to a first and a second mortgage were sold in execution of a decree to a certain person who afterwards paid off the first mortgage; and it was held by the Privy Council that, as he had a right to extinguish the prior charge or to keep it alive, the question for consideration was, what intention was to be ascribed to him, and that, in the absence of evidence to the contrary, the presumption was that he intended to keep it alive for his own benefit. It was further held that, where a property is subject to a succession of mortgages and the owner of an ulterior interest pays off an earlier mortgage, though according to the English practice, it is assigned to a trustee for his benefit as against intermediate mortgagees to whom he is not personally liable, yet in India a formal transfer for the purpose of a mortgage is never made, nor is an intention to keep it alive ever formally expressed. The same view was followed in a later case—the case referred to by the learned Judge of the Court below, namely, that of Dinobundhu Shaw Chowdhry v. Jogmaya Dasi. The facts of that case are, in some important particulars, similar to the facts of the case now before us. There were two earlier mortgages, and, pending the attachment of the property in execution of a certain decree, a large sum of money was advanced by a subsequent mortgagee, and by this sum those two mortgages were paid off, and the property was reconveyed to the mortgagor, who handed over the reconveyance to the subsequent mortgagee. Subsequently, a portion of the property was sold under the said decree, and it was purchased by another party, who claimed to have acquired the same free from the prior incumbrances. And it was held that the intention of the parties was that the earlier mortgages should not be extinguished on being paid off, but were to be kept alive for the benefit of the subsequent mortgagee, the object being to give him the only charge on the property. In the course of the judgment, delivered by Lord Lindley, he observed as follows:—“The law upon this subject and its application to transactions in India will be found in Mohesh Lal v. Bawan Das(4) and Gokaldas Gopaldas v. Purahmal Premsukhdas. The Subordinate Judge has summed it up accurately thus:—“When the owner of an estate pays charges on the estate which he is not personally liable to pay, the question whether those charges are to be considered as extinguished or as kept alive for his benefit is simply a question of intention. The intention may be found in the circumstances attending the transaction or may be presumed from a consideration of the fact whether it is or is not for his benefit that the charge should be kept on foot.” Here the mortgagor was paying off his own debts but he was doing so for the benefit of Mustafi and in performance of the agreement with him. The same observations equally apply to the circumstances of the present case. These cases, we think sufficiently show that the provisions of sec. 80 of the Transfer of Property Act do not exclude the application of the principle which has been adopted by the Judicial Committee, and which is a principle that has to be kept in view in determining a question like the one which arises in this case, that question being whether it was the intention of the parties that the earlier mortgage should be extinguished or should be kept alive for the benefit of the mortgagee. The learned Judge, as it seems to us, did not appreciate the bearing of the case that he refers to, nor does it appear that he considered the other cases which bear upon the same point. However that may be, upon the question of intention, which was a question of fact that he had to consider, the learned Judge seems to think that because the incumbrance in favour of the Plaintiff was not specifically mentioned at the time of the Defendants' mortgage, and because, so far as they were concerned, they were not aware of the mortgage in favour of the Plaintiff, that, therefore, they could not have possibly Intended to keep alive the liens of the former mortgagees for their own benefit against the mortgage of the Plaintiff. We think that, in accepting this view, the learned Judge has gone somewhat astray. According to the view that was expressed in the case of Dinobundhu Shaw Chowdhry v. Jogmaya Dasi, the intention may be found in the circumstances attending the transaction or may be presumed from a consideration of the fact whether it is or is not for his benefit that the charge should be kept on foot. It has however been contended by the learned vakil for the Respondents before us that, the question of intention being a question of fact, and the learned Judge of the Court below having come to a finding upon that question, it is not open to this Court to interfere with it in second appeal. But, as pointed out by the Judicial Committee in the case of Ram Gopal v. Shamskhaton, where an Appellate Court draws a conclusion from certain facts found, and if such conclusion is an erroneous conclusion, the error committed is in a matter of law, and which the High Court in second appeal has the power to interfere with. In the present case we are of opinion that the conclusion or inference drawn by the learned Judge from the fact—and which is the only fact referred to by him, viz., that the incumbrance in favour of the Plaintiff was not known to the Defendant at the time of their mortgage—is a conclusion which cannot legitimately be drawn. We are, therefore, constrained to set aside his judgment and send the case back to him for reconsideration. It will be the duty of the Judge, to determine, having regard to the cases to which we have referred and to other cases which bear upon the same matter, the question whether it was the intention of the parties that the earlier mortgage should be extinguished, or that it should be kept alive for the benefit of the mortgagee Defendants and then pass such decree which he may be advised to make in the case. Costs will abide the result.

N.G

Appeal allowed:

Case remanded.