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1903 Supreme(Cal) 78

CALCUTTA HIGH COURT
Pargiter, J., Banerjee, J.
Magniram - Appellant
Versus
Mehdi Hossein Khan - Respondent
Decided On : 03-06-1903

Headnote:

Contribution - Mortgage - Transfer of Property Act, 1882, Sections 56, 81, 82 - Code of Civil Procedure, 1898, Section 13 - - The court discussed the applicability of the principle of res judicata, the right to contribution between purchasers of mortgaged property, and the rule of inverse order of sale. It held that the principle of res judicata did not apply, as the issue of contribution was not directly and substantially in issue in the previous mortgage suit. The court also held that while the Transfer of Property Act does not explicitly provide for marshalling between purchasers, it is equitable to allow contribution based on the proportionate value of the properties. The court rejected the argument that the rule of inverse order of sale should apply, finding that it is more equitable to distribute the mortgage debt proportionally based on the value of the properties. The court ultimately determined the amount of contribution payable by the defendants based on the proportionate value of the properties, taking into account the fact that the defendants paid a higher amount than the actual value to satisfy the mortgage debt completely.

Fact of the Case:

The plaintiff purchased two properties at an execution sale, which were subject to a prior mortgage. The defendants purchased the other two mortgaged properties. The mortgagee obtained a decree and sold the plaintiff's properties, satisfying the entire mortgage debt. The plaintiff sued the defendants for contribution, arguing that the sale of his properties satisfied the mortgage debt and he was entitled to a share of the amount paid by the defendants.

Finding of the Court:

The court found that the principle of res judicata did not apply because the issue of contribution was not directly and substantially in issue in the previous mortgage suit. The court also found that while the Transfer of Property Act does not explicitly provide for marshalling between purchasers, it is equitable to allow contribution based on the proportionate value of the properties. The court rejected the argument that the rule of inverse order of sale should apply, finding that it is more equitable to distribute the mortgage debt proportionally based on the value of the properties. The court ultimately determined the amount of contribution payable by the defendants based on the proportionate value of the properties, taking into account the fact that the defendants paid a higher amount than the actual value to satisfy the mortgage debt completely.

Issues: The issues raised in the appeal were: (i) Whether the suit was barred by the principle of res judicata; (ii) Whether Section 82 of the Transfer of Property Act barred the suit; (iii) Whether the defendants could claim the right to throw the whole of the mortgage debt upon the plaintiff's properties; and (iv) To what amount, if any, was the plaintiff entitled by way of contribution.

Ratio Decidendi: The court held that the principle of res judicata did not apply because the issue of contribution was not directly and substantially in issue in the previous mortgage suit. The court also held that while the Transfer of Property Act does not explicitly provide for marshalling between purchasers, it is equitable to allow contribution based on the proportionate value of the properties. The court rejected the argument that the rule of inverse order of sale should apply, finding that it is more equitable to distribute the mortgage debt proportionally based on the value of the properties.

Final Decision: The court decreed in favor of the plaintiff, ordering the defendants to pay the plaintiff a sum equal to the difference between the real value of his properties and the liability they were under, which had been satisfied by the sale of the property.

JUDGMENT

Banerjee and Pargiter, JJ. - The suit out of which this appeal arises was brought by the plaintiff appellant to recover a certain sum of money by way of contribution from the defendants 1st party. The main allegations upon which the suit is based are shortly these: That the predecessors in interest of the defendants 2nd party on the 15th of October 1881 mortgaged their share in four properties, Dighout Titaria, Kunda, Lakhan Dhanaman and Chhathu Dhanaman to one of the defendants 4th party for Rs. 8,000; that out of the mortgaged properties the first two were purchased on the 12th of January 1888 by the defendants 1st party, and the remaining two properties were purchased by the plaintiff at an execution sale on the 9th of July 1888; that subsequently the mortgagee, the defendant 4th party, having obtained a decree on his mortgage on the 26th of April 1892, caused the sale of the last two properties on the 23rd of May 1893, and the defendants 1st party purchased the same for Rs. 21,000, and this sale had the effect of satisfying the entire Mortgage debt due to the decree-holder; that as the sum of Rs. 21,000 realised by the" sale of the plaintiff's property went to satisfy the mortgage on all the four properties, it should be held that the mortgage has been satisfied with the plaintiff's money, and the plaintiff is accordingly entitled to contribution from the defendants 1st party, the amount of such contribution being the excess of the amount so paid with one which was the value of his property, over his share of the liability for the mortgage debt; that he sum of Rs. 21,000 has therefore to be divided in proportion to the vales of the two properties purchased by the plaintiff and the two purchased by the same proportion will give for the plaintiff's must be taken to have paid Rs. 15,000 and odd in excess of his share of the mortgage debt which he was really liable to pay; and accordingly the plaintiff brings this suit to recover that sum together with interest amounting in all to Rs. 24,000.

2. The defence of the defendant 1st party was, so far as it is necessary to consider it for the purposes of this appeal, to the effect that this suit was not maintainable, as the mortgage decree in execution of which the sale of the plaintiff's mouzahs took place and to which the plaintiff was a party, expressly directed the sale of those mouzahs in the first instance; and that the sum of Rs. 21,000 paid by the defendants 1st party Wais far in excess of the real value of the property purchased by them, and they paid that amount with the object of having the mortgage debt completely satisfied so that the property which they had purchased might not be brought to sale.

3. The Court below upon these pleadings framed certain issues of which the third is the only one of importance for the purposes of this appeal, and which was in these terms, namely:

Whether the plaintiff is entitled to any and what contribution from defendants 1st party?

4. And the learned Subordinate Judge below has answered the questions raised in this issue against the plaintiff, holding in the first place that the decision in the mortgage suit to which the present plaintiff and defendants let party were both parties, operated as res judicata against the present claim, and further that the claim for contribution was barred by Section 82 of the Transfer of Property Act, and, in the second place, he has held that the amount paid by the defendants 1st party for their purchase' at the execution sale was much in excess of the value of the properties purchased and that that amount was paid only to pay off the mortgage debt completely; and the Court below has accordingly dismissed the plaintiff's suit.

5. Against the decree of the lower Court dismissing the suit, the plaintiff has preferred the present appeal, and the questions raised for our, determination in this appeal are:

(i) Whether the suit is barred by the principle of res judicata;

(ii) Whether Section 82 of the Transfe

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