Trevelyan and Beverley, JJ.
1. The facts which it is necessary to narrate for the purpose of determining the questions which we have to decide in this appeal are as follows: On the 21st June 1886 the first defendant mortgaged to the plaintiff, for the purpose of securing the sum of two thousand rupees with interest at 24 per cent, per annum, one pucca house and a second house, partly pucca and partly cutgha, and the land upon which those houses stand, and a 2 annas and 8 gundas 2 dunts share in Mouza Chapra Harchand. On the 17th August 1886 the first defendant mortgaged to the father of the second defendant the -pucca house above mentioned. It is admitted that when this second mortgage was executed the mortgagee had no notice of the first mortgage, except so far as the fact that the first mortgage was registered can be said to have given him notice of it. On the 30th July 1887, the second defendant's father obtained a mortgage decree against the first defendant. On the 21st June 1889 the first defendant executed another bond for Rs. 1,440, the interest then due under the bond of 21st June 1886, and for a further loan of Rs. 800, and gave to the plaintiff another mortgage of the properties covered by the first mortgage in order to secure those two sums and interest thereon at 24 per cent, per annum, On the 15th April 1891, the property, the subject of the second mortgage, was sold in pursuance of the decree to which we have referred and was purchased by the second defendant. At that sale notice was given of the plaintiff's claim under the first mortgage. This suit was brought on the 4th April 1893 for the purpose of enforcing payment of the money due to the plaintiff on the first mortgage of 21st June 1886, the plaintiff giving up his claim under the second bond on the 21st June 1889.
2. The second defendant contended that the effect of the subsequent mortgage to the plaintiff was to satisfy the claims for interest under the first mortgage which had accrued due at the time of the execution of the subsequent mortgage; and he also contended that he was entitled under the terms of Section 81 of the Transfer of Property Act to require the plaintiff in execution of this decree to sell first those of the mortgaged properties which were not covered by mortgage to the second defendant. These two contentions were negatived by the learned Subordinate Judge, and the question which we have to decide is whether that decision is right.
3. With regard to the first question, we think we must hold that the interest due under the first mortgage was not satisfied by the subsequent mortgage. The learned Subordinate Judge has rightly acted on the authority of the case of Gopal Chandra Sreemany v. Herembo Chandra Haldar I.L.R. 16 Cal. 523. The question is, as was shown in that case, one of intention; and it is not shown here that it was the intention of the parties to get rid of the earlier security. On the contrary, although the second bond of 1889 was given partly to secure the three years' interest then due upon the amount of the bond of 1886, it is clear that the real object was to secure compound interest upon that amount, and that the intention of the parties was that the bond of 1886 should be kept alive, not only as regards the principal and future interest, but also as regards the interest for those three years. The same property is. mortgaged; the interest payable is the same; and there is no acceptance of any debt under the bond of 1886.
4. We do not, however, agree with the view which the- learned Subordinate Judge has taken of the second question. This question in the main depends upon whether mere registration is notice within the meaning: of Section 81 of the Transfer of Property Act. Section 3 of that Act says: 'A person is said to have notice of a fact, when he actually knows that fact, or when but for wilful abstention from an enquiry or search, which he ought to-have made, or gross negligence, he would have known it.' Although in Bombay the High Court, adopting the American law as laid down in Story's Equity Jurisprudence, has held that registration amounts to constructive notice [Lakshman Dan Sarup Chand v. Dasrat I.L.R. 6 Bom. 168], that view has been dissented from by the Madras High Court [Shan Maun Mull v. Madras Building Company I.L.R. 15 Mad. 268]; and we are not aware that it has ever been adopted in this Court. We cannot say that search in the Registration Office is one which in law an intending mortgagee is bound to make, and that his abstention from such enquiry amounts to gross negligence within the meaning of the definition. It is true that a careful mortgagee would ordinarily hold his. mortgagor at arm's length, and would take every precaution to prevent the loss of his money, but it is quite another thing to say that in law he ought to make such enquiry, or that the absence of such inquiry amounts to gross, negligence. This Court has never, so far as we are informed, gone to the extent of holding that registration is notice, and, whether it be for some purposes notice or not, we think it quite clear it is not notice within the meaning of Section 81 of the Transfer of Property Act. It follows that the second mortgagee was entitled to insist upon the plaintiff marshalling his securities.
5. There remains this question, whether that right has been lost to the second mortgagee, because at the time of the sale he received notice of the earlier-mortgage. It is a notice at or before the time of the mortgage which under time terms of the section alone negatives the right, and the purchaser, whether he be the original mortgagee or not, purchases, not only the rights of the mortgagor, but all the rights of the mortgagee acquired up to the sale, including the right to insist on the plaintiff marshalling his securities. There is. nothing in Section 81, or, as far as we know, elsewhere, to destroy the right, of marshalling by a notice given subsequent to the mortgage.
6. It is said that, if we affirm this right of marshalling, we should be causing; injustice to the plaintiff, as the property which is not mortgaged to the second defendant is claimed by others as wakf property, and that therefore the plaintiff would probably have to stand a suit before he could acquire the property, even if he were successful in such suit. This consideration we think should not be acted upon by us. We must assume that the plaintiff took a mortgage-of property, which, so far as he was aware, was free from claim, and the risk of the application of Section 81 of the Transfer of Property Act is one which every mortgagee must take. The mere fact that somebody has claimed, or is, likely to claim, this property cannot get rid of the second defendant's right to-insist upon the plaintiff marshalling his securities. We cannot find that this, suggestion of wakf was argued in the first Court, and there is nothing in the evidence to satisfy us that the properties are unsaleable. In our opinion this second contention of the defendants must prevail, and the plaintiff must by the decree be required, before selling the properties which are the subject of the second defendant's, mortgage, to sell the other properties mortgaged to him. In other respects the appeal fails, and we therefore make no order as to the costs.