When an owner pays off prior charges for another's benefit, whether those charges remain alive depends on the parties' intention. Additionally, Section 276 of the Code of Civil Procedure does not void transactions that do not prejudice the execution creditor or grant them a fee simple over an equity of redemption.

Judgement

Appeal from a decree of the High Court (June 3, 1898) affirming a decree of the Subordinate Judge of the 24 Pergunnahs (April 16, 1896).

Nistarini, the widow of Mustaphi and predecessor of the respondents, sued, under the circumstances stated in their Lordships judgment, Prashid, her mortgagor, and the appellant, the purchaser at a sheriffs sale of part of the property comprised in her mortgage deed, for a declaration of (1.) her priority of claim to the mortgage property; (2.) that the appellant had purchased only the equity of redemption, subject to her claim, and with notice thereof; (3.) for an account and payment or sale.

The appellant pleaded that the said property had been attached on October 5, 1891, at which time he believed that the same was free from all charges, except such attachment; that it was purchased by him on July 28, 1892, at a sale under the attachment; that the sale was confirmed by the High Court on September 5, 1892, and that he had obtained a sale certificate and possession of the said property; and he denied that the mortgage to Nistarinis husband had any force, or that Nistarini had any rights in or over the said property.

The Subordinate Judge held that at the time of the attachment all the interest remaining in the mortgagor was the equity of redemption; that the attachment did not, and could not, affect the interest then vested in the prior mortgagees; and that upon the reconveyance by the previous mortgagees to the mortgagor, upon the satisfaction of their mortgages out of the money advanced by Mustaphi, the rights of Mustaphi as mortgagee of the property were perfected; and further, that there was, no sign of any intention on the part of Mustaphi to forego the benefit of the prior securities, but that, it being for his benefit to keep the prior charges alive, it was open to the Court to presume, and the Court did presume, that he intended to do so.

He was therefore of opinion that Nistarinis right prevailed over the appellants title by purchase at the execution sale. He accordingly gave judgment for Nistarini, directing that there should be the usual mortgage decree in her favour, under s. 88 of the Transfer of Property Act (Act

IV. of 1882).

The High Court held that, according to the authorities, the principle governing such cases is that the question of whether it was intended to keep the prior security alive or not was a question of the intention of the parties to the transaction, and that in this case it was abundantly clear that it was the intention of the parties to keep alive the former securities for the benefit of the new mortgagee, who was providing the money required for satisfying the claims of the former mortgagees.

They held further that, as the mortgage to Mustaphi was executed on October 7, 1891, and provided the money with which the prior mortgages were paid off on October 8, 1891, the Subordinate Judge had rightly held that Mustaphi had such an interest in the mortgaged property as entitled him to pay off the former mortgagees, and obtain for himself the benefit of such payments.

They held further that all that could have been attached, and all that was attached, on October 5, 1891, was the equity of redemption, which was all the mortgagor then had; and that consequently this was all that was sold to, and purchased by, the appellant.

They held, however, that all that came before the claim of the present appellant was the amount actually paid to the earlier mortgagees; and upon this basis they amended the decree of the First Court.

Sir W. Rattigan, K.C., and C. W. Arathoon, for the appellant, contended that there was no evidence of any intention on the part of Mustaphi or his mortgagor to keep alive the prior securities which had been paid off by the mortgagor, to whom reconveyances had been executed. Those mortgages had, therefore, been completely extinguished. There had been a release of the debts due see Adams v. Angel (( 1877)-5 Ch. D. 634, 615.), according to whi