JUDGMENT

Sproule J:

After stating the facts and dealing with certain matters not material to this report procedeeded:-

The claimants ask for a release of the property seized upon three grounds, (a) that it would be inequitable to allow plaintiff to proceed with his execution before the decision of the suit instituted (or threatened) by Mr Ross, (b) upon the ground that defendant at the date of seizure had no beneficial interest whatsoever in the land seized, and that no priority of instruments arising out of the operation of the Registration of Deeds Ordinance could avail against the claimants equities, (c) that by analogy with the decision in Whiteley v. Delaney [1914] AC 132 and in equity, the mortgage to Khoo Cheow Teong was not merged in the conveyance to claimants, but was kept alive for their benefit and carried their title back to the date of the registration of such mortage, which was long prior to the registration either of the Registrar's order of 29th January 1916 or of the reconveyance to the defendant of 18th August 1915. (The learned Judge then dealt with the first ground which he decided against the claimants).

As to the third ground of the claim, it is an ingenious argument, and I am not sure that it is not sound.It is certainly unanswered.Mr Cleaver argues thus.The claimants advanced money to Khaw Joo Choe for the express purpose of paying off Choo Cheow Teong's mortgage, though not ready at that time to take a conveyance to themselves.To the extent of their advance, Khaw Joo Choe was a trustee for them.When Khoo Cheow Teong received the money, he in turn became a trustee of the legal estate for the claimants as transferees in equity of the mortgage to the extent of the amount advanced by them.The claimants having thus become entitled in equity to the priority of Khoo Cheow Teong's mortgage, this priority could not be taken from them without their consent.Do the reconveyance to Khaw Joo Choe and the subsequent conveyance to themselves furnish evidence of their consent or their intention to forego such priority, seeing that in place of a conveyance the claimants might have taken a legal transfer of the mortgage? One reason for a negative answer is that Khaw Joo Choe was their trustee, took the reconveyance and his title deeds only to hand them over to the claimants the same day, and on the same day executed a conveyance to them and gave them possession of the land.Arguments to the contrary which might be based upon the doctrine of derogation (as in Toulmin v. Steere [1817] 3 Mer. 210 are dealt with in the judgment of the Lord Chancellor in Whiteley v. Delaney. They are further met by the cases showing the refusal of the Privy Council to apply the principle of Toulmin v. Steere in Indian cases. Lord Haldane says, moreover, on page 145 of the report of Whiteley v. Delaney "Indeed, it is now quite plain that a purchaser from a "mortgagor and the first mortgagee can always, if he "chooses, keep the first mortgage alive, and so protect "himself against subsequent incumbrances, whether he had "notice of them or not." The principles of equity would always credit the purchasers with such a choice, if it be for his own benefit, unless there be evidence to the contrary which brings in the operation of merger.There is no such evidence here, and the claimants are entitled to say that the mortgage to Khoo Cheow Teong is still alive for their benefit and gives them priority over the order registered on 8th February 1916.

That is a rough summary of the claimants case upon this ground of their claim. I have not given it the study it demands, preferring to base my judgment upon the second issue raised.But superficially, at any rate, as I have stated, the argument appears to be sound and well-founded.

And so we come to the second ground of claim, which was the principle issue contested between the parties.It is quite clear that defendant on 18th August parted with the whole of his beneficial interest in the land seized.There was no be