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Issues: (i) Whether the document in question created only a usufructuary mortgage or also contained a personal undertaking by the mortgagor to repay the money advanced. (ii) Whether an unregistered mortgage deed could be used to prove receipt of consideration or the loan, and whether the case had to be remitted for a fresh finding on that question.
Issue (i): Whether the document in question created only a usufructuary mortgage or also contained a personal undertaking by the mortgagor to repay the money advanced.
Analysis: A usufructuary mortgage is one where possession is delivered to the mortgagee, who retains it until payment of the mortgage-money and appropriates rents and profits in lieu of interest or towards the debt. The terms of the document showed delivery of possession, retention of possession until payment, and appropriation of rents and profits, which satisfied the statutory characteristics of a usufructuary mortgage. The stipulation that the mortgagor would not claim the shop until the amount was repaid did not amount to a personal promise to pay. A distinction was drawn between an express undertaking to pay the debt and a mere obligation not to assert rights over the mortgaged property until repayment.
Conclusion: The document did not contain a personal covenant to repay and was only a usufructuary mortgage.
Issue (ii): Whether an unregistered mortgage deed could be used to prove receipt of consideration or the loan, and whether the case had to be remitted for a fresh finding on that question.
Analysis: Since the document was unregistered, it could not operate to affect immovable property, and the recital acknowledging receipt of consideration on account of the mortgage was inadmissible. The earlier findings had relied on that document to hold that the money was paid, which was impermissible. However, the plaintiff could still succeed on a money claim if the advance was independently proved from admissible evidence. The proper course was therefore to ignore the document on the issue of payment and obtain a finding on the evidence already on record.
Conclusion: The document was inadmissible to prove receipt of consideration, and the matter had to be remitted for a fresh finding on payment without relying on it.
Final Conclusion: The appeal succeeded and the matter was sent back for decision in accordance with law on the limited issue of proof of payment, after excluding the inadmissible document.
Ratio Decidendi: An unregistered mortgage deed cannot be used to prove a receipt of consideration that affects immovable property, and a mere stipulation postponing the mortgagor's claim to the property until repayment does not by itself create a personal covenant to pay.
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