What is Mortgage to secure uncertain amount when maximum is expressed? Section 79 of Transfer of Property Act, 1882
79. 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.
A mortgages Sultanpur to his bankers, B & Co., to secure the balance of his account with them to the extent of Rs. 10,000. A then mortgages Sultanpur to C, to secure Rs. 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 Rs. 5,000. B & Co. subsequently advance to A sums making the balance of the account against him exceed the sum of Rs. 10,000. B & Co. are entitled to the extent of Rs. 10,000, to priority over C.
Rights and liabilities of Mortgagee
Section 74 - Right of subsequent mortgagee to pay off prior mortgagee
Section 75 - Rights of mesne mortgagee against and subsequent mortgagees
Section 80 - Tacking abolished