“He who is prior in time is better in law.” Explain this statement.

Question: “He who is prior in time is better in law.” Explain this statement. [UPJS 2023]

Find the answer to the mains question of Property Law only on Legal Bites. [“He who is prior in time is better in law.” Explain this statement.]

Answer

The doctrine of priority is provided under Section 48 of the Transfer of Property Act of 1882. The doctrine of priority is based on the principle of the legal maxim ‘Qui prior est tempore potior est jure’, which means ‘he who is prior in time is better in law.’

According to the doctrine of priority, if a right is made in favour of a person at a particular point of time in some property and subsequently another right is made in favour of another person in the same property, then the person who had a priority of right in the property will also get the priority in law to such property.

In simple terms, if a transferor transfers or creates a right in favour of two different persons, then the person whose right was created first will get the advantage over the right of another person (whose right was created later).

Section 48 of the Transfer of Property Act can be invoked only when there is a clash of rights as to which right will get the priority.

For example, X is the owner of a piece of land, which she mortgaged to Y in 2020. Later, in 2021, X transferred the same property to Z. Applying the doctrine of priority in the above case, Y will get a right of priority of all the rights of the property over Z.

Exceptions to the Doctrine of Priority

The Transfer of Property Act under sections 78 and 79 provides for the exception to the general rule of doctrine priority under section 48. 

Postponement of Prior Mortgagee

Postponement of a prior mortgagee is the first exception to the doctrine of priority, which is provided under section 78 of the Transfer of Property Act.

According to this exception, if the prior mortgagee creates some fraud, misrepresentation or gross negligence and induces any third person to advance money for the mortgaged property, then the prior mortgagee is postponed to the subsequent mortgagees. The subsequent mortgagee will get priority in the rights of the property over the prior mortgagee.

The subsequent individual, or the third person, was innocent at his end since he was not aware of the fraud, misrepresentation, or flagrant carelessness.

As an illustration, X mortgages a house to Y. Later, X lends Z a mortgage on the same house. Before giving X the money, Z asks Y if the property is clear of liens or other obligations. Y conceals his mortgage in deception, while Z makes the payment. Y was the previous mortgagee, but because of his wilful concealment, his prior entitlement was delayed.

Section 79 of the Transfer of Property Act provides for the second exception to the general rule of right to priority. These are its essentials:

a) There must be a maximum sum that has been secured under the first mortgage.

b) The second mortgagee must have notice of the existence of the first mortgage.

c) The prior mortgagee must have advanced more money within the maximum limit after the second mortgage.