Section 79Mortgage to secure uncertain amount when maximum is expressed

s. 79

79. Mortgage to secure uncertain amount when maximum is expressed If a mortgage made to secure future advances, the performance of an engagement or the balance of a running account, expresses the maximum to be secured thereby, a subsequent mortgage of the same property shall, if made with notice of the prior mortgage, be postponed to the prior mortgage in respect of all advances or debits not exceeding the maximum, though made or allowed with notice of the subsequent mortgage. Illustration A mortgages Sultanpur to his bankers, B & Co., to secure the balance of his account with them to the extent of Tk. 10,000. A then mortgages Sultanpur to C, to secure Tk. 10,000, C having notice of the mortgage to B & Co., and C gives notice to B & Co. of the second mortgage. At the date of the second mortgage, the balance due to B & Co. does not exceed Tk. 5,000. B & Co., subsequently advance to A sums making the balance of the account against him exceed the sum of Tk. 10,000. B & Co., are entitled, to the extent of Tk. 10,000, to priority over C.