A mortgagor who has conveyed property to mortgagees cannot grant a binding lease without their concurrence. A subsequent lease supported by the mortgagees' consent prevails over a prior lease granted without such consent.

Lord Tomlin.-

This is an appeal from the Court of appeal for Eastern Africa, allowing the respondents' appeal from the High Court of -anzibar. The facts are shortly as follows: One Mahomed Bin Salem el Jaseri owned certain shambas. In August 1921, he mortgaged them to the respondents, Cowasji Dinshaw and Brothers, and he made a second mortgage in April 1923, to the respondent Dr. Lawrence D'Albuquerque. Both mortgages were in the same form. On 2nd March 1928, Mahomed Bin Salem el Jaseri granted a lease to the appellant, Fazel Mohamad Champsi. The mortgagees did not concur in that lease. Later on, on 16th March 1928, he granted a second lease to the respondent, Pedro Domingos D'Sa. It is said that either the second lease was granted with the concurrence of the mortgagees, or, the mortgagees approbated the lease afterwards by joining in the present suit. The mortgagees and Pedro Domingos D'Sa, the second lessee, launched the suit against the mortgagor and the appellant Fazel Mohamed Champsi, the first lessee, asking for a declaration that Fazel Mohamed Champsi's lease was void against the mortgagees and seeking for possession of the property to be delivered to Pedro Domingos D'Sa as the lessee under the second lease. After the suit was launched Mahomed Bin Salem el Jaseri went bankrupt and his assignee was added in his place, and the assignee and Fazel Mohamed Champsi are the present appellants.

Issues were directed. They were two in number. Issue 1 was as to the validity of the first lease, having regard to the fact that it was not registered. On that point both Courts have determined that it was valid, notwithstanding the absence of registration, and no question now arises under that head. Issue 2 was : If the first lease was valid, does the consent of the two mortgagees, if even proved, to the second lease oust the first lessee's rights under the first lease ? On that issue the trial Judge held that the mortgagor remained the owner of the property, and that that being so, he was in a position to grant the lease. The learned Judge said that the mortgagor in possession continued, even after executing the plaintiffs' mortgage, to be the owner of the property, and that he was entitled to lease the property provided that this act did not come within S. 66, of the Transfer of Property Decree.

The respondents, that is, the plaintiffs in the action, appealed to the Court of appeal, and the Court of appeal determined that the mortgagor was not free as against the mortgagees to lease the property without their concurrence and that therefore, as against the first lessee, the second lease must prevail.

The appeal to His Majesty in council is by the assignee of el Jaseri and the first lessee against that decision. There was some debate as to the meaning and effect of the mortgages. It was questioned whether the mortgages were in form English mortgages within the meaning of S. 58, Transfer of Property Decree of 1917, or whether they were anomalous mortgages as defined in S. 98 of the same decree. The learned Judge in the Court below had taken the view that they were not English mortgages, but anomalous mortgages. The Court of appeal took the view that it did not matter whether they were English mortgages or anomalous mortgages because in either case the effect of the mortgages was to transfer the property to the mortgagees and that being so, whether they were English mortgages or anomalous mortgages, the property being in the mortgagees, the mortgagor was not free to grant a lease which would bind the mortgagees.

Their Lordships are of opinion that, having regard to the terms of the mortgages, which convey the property to the mortgagees, the view which the Court of appeal took of the matter is correct and that the first lease cannot, therefore, prevail as against the second lease, assuming that the second lease was concurred in by the mortgagees.

The Court of appeal set aside the judgment of the learned Judge in the Court below and directed that