Equitable doctrine of subrogation can be invoked to confer rights to the security held by another when one pays a mortgage debt for their own protection or for the benefit of another.

Sundaram Chetty, J.

1. Defendant 5 is the appellant. His mortgage is evidenced by Ex. 1 which was executed in the year 1923. In that mortgage deed, there is an undertaking for the discharge of a still prior mortgage (Ex. B) for Rs. 500 held by one Murugesa Mudaliar. Defendant 5 made default in the discharge of that mortgage debt and thereupon the mortgagors executed another mortgage in favour of one Alagiriswami Chetty for Rs. 700 in 1924 which is evidenced by Ex. A. A portion of the consideration for this mortgage, viz., a sum of Rs. 560 was paid by Alagiriswami in discharge of the mortgage debt due under Ex. B. Subsequently in 1927 the same property was mortgaged to the plaintiff for rupees 1,000 under Ex. C. A sum of Rs. 700 out of this consideration was paid in discharge of the mortgage debt due under Ex. A. In the present suit brought by the plaintiff for the recovery of the amount due to him under Ex. C, defendant claims priority. To his claim the plaintiff sets up a counter by reason of his having discharged Alagiriswamis mortgage under Ex. A. He wants to be subrogated to the rights of Murugesa under the earliest mortgage deed Ex B. There is no doubt that if the plaintiff could be subrogated to the rights of Alagiriswami, he could equally be subrogated to the rights of Murugesa, but the dispute is as regards the right of subrogation claimed by the plaintiff in respect of Alagiriswamis mortgage.

2. Under the old Transfer of Property Act, the plaintiff could not claim a statutory right of subrogation, for the simple reason that when he made the payment on 6th September 1927, he had not obtained a registered mortgage deed in his favour. Strictly speaking, he was not a puisne encumbrancer when he made the payment on that date towards the mortgage deed Ex. B, but the question which remains for consideration is whether the equitable doctrine of subrogation as recognized by judicial decisions cannot be invoked for the aid of the plaintiff in this case. We find from Ex. C that the plaintiff paid the sum of Rs. 700 towards Alagiriswamis mortgage debt as requested by the mortgagors and in pursuance of the agreement for the mortgage entered into between him and the debtors. There is no difficulty in holding that the plaintiff made this payment in order to discharge the previous mortgage debt of Alagiriswami and to protect his own interest which would accrue to him on the execution of the mortgage deed in pursuance of the agreement. He is not therefore a mere volunteer who intermeddles with the estate of another and in whose favour no equitable considerations arise. The equitable principle has been well stated in Jones on Mortgages, which is extracted in the decision in Narayanakutti Gounden v. Techiammal (1913) 36 Mad. 426 :

Under the equitable principle of subrogation, one who pays a mortgage debt under an agreement for an assignment or for a new mortgage, lot his own protection or for the benefit of another, acquires a right to the security held by the other.

3. The same rule has been stated in an American case quoted on the same page from which this principle is clear, viz., Where one advances money under an agreement, express or implied, made either with the debtor or creditor, that he would be subrogated to the rights and remedies of the creditor, that equitable right can be enforced by such a person when a necessity arises later on. In the present case, can we imply such an agreement from the circumstances disclosed in the evidence? The very recitals in the mortgage deed (Ex. C) clearly show that there must have been an agreement between the plaintiff and the mortgagors for the payment of a portion of the consideration in discharge of the earlier mortgage debet of Alagiriawami. In pursuance of that agreement, the payment was made on 6th September 1927, and the mortgage bond itself was got back with the endorsement of discharge. On the very next day, the mortgage deed itself was executed in plaintiffs favour, and he retai