The main legal point established in the judgment is that a mere change in the form of indebtedness or the mode of payment does not extinguish a mortgage, and payments towards the debt secured by the mortgage can affect the limitation period.

Srinivasa Aiyangar, J.

1. This is an appeal by defendants 23 to 31 and the question for decision is whether their mortgage lien has priority over that of the plaintiff.

2. On the 8th July 1882 the then Rajah of Karvetnagar and his son Rajah Bomma Raja Bahadur mortgaged to one Subbamma four villages belonging to them to secure the repayment of Rs. 25,000 borrowed by them from her, and interest thereon at 9 per cent per annum. They agreed to pay interest every year and interest on overdue interest at the same rate and to pay the principal on demand.

3. On the 15th December 1888 Rajah Bomma Raja Bahadur who had become the Rajah on his fatherss death mortgaged to Subbamma the same four villages and two others in addition, to secure the sum of Rs. 37,791 then due on the previous mortgage and agreed to pay interest at the reduced rate of 6 per cent per annum for the future and to pay the principal on the 30th December 1893. The plaintiff is the assignee of the mortgage.

4. In the meantime on the 24th September 1887, the same mortgagor had mortgaged three of the four villages comprised in the first mortgage to the ancestor of defendants 23 to 31 to secure a sum of Rs. 18,336-6-6 and interest thereon at 6 per cent per annum. The mortgage money not having been paid on the due date the mortgagee sued the mortgagor, obtained a decree and purchased the villages in court-sale. To these proceedings Subbamma was not a party.

5. When the mortgage of 1888 was executed, an endorsement was made on the first mortgage instrument to the effect that as a separate deed was executed for the principal and interest due on that instrument it was cancelled and returned. This is signed by the treasurer of the mortgagor. The mortgage document was however retained by the mortgagee and was produced by the plaintiff along with his plaint.

6. In these circumstances two points were raised on behalf of defendants Nos. 23 to 31. First of all it was said that the mortgage of December 1888 extinguished the previous mortgage and that therefore their mortgage of 1887 which was prior in date had priority. The decision of this Court in Mahalakshmi v. Sriman Madhava Siddanta (1911) I.L.R. 35 M. 642 and that of the Judicial Committee in Mahomed Ibrahim Hussain Khan v. Ambica Prasad Singh (1912) I.L.R. 39 C. 527 on which the appellants relied for another purpose are against this contention. It is now well settled that a mere change in the form of indebtedness, in the mode or time for payment, a variation of the rate of interest, or the giving of additional security is not enough to rebut the presumed intention to retain the mortgage security when it is to the interest of the person who is entitled either to extinguish the security or keep it alive, so to keep it alive. See Jones on Mortgages, Section 294. A considerable number of instances illustrating the principle is found in a note to a case, Dumell and Wife v. Terstegge 85 Ame. Dec. 466. Unless the debt was actually paid or the security expressly released the mortgage is not extinguished. The endorsement on the first mortgage instrument on which stress was laid does not operate as a release of the security and there was no payment of the debt.

7. The effect then of the 2nd bond was merely to substitute a covenant to pay the mortgage-money on the 30th December 1893, for the covenant to pay on demand and to lower the rate of interest payable thereafter, without in any way affecting the security for the payment of the mortgage money. An agreement between the mortgagor and the first mortgagee extending the time for payment of the mortgage amount in no way impairs the security even as against the subsequent incumbrancers for the junior encumbrancer is not surety for the mortgagor. It certainly does not as against the mortgagor. Jones on Mortgages Section 942; Bank of Utica v. Finch 49 Amer. Dec. 175. Blacks Article on Mortgages in the American Cyclopaedia page 1414; Ghose on Mortgages, page 466. Of course no agreement betw