Section 3

The non-production of the deeds is material, not only as it deprives the purchaser of the usual means of verifying the title deduced, but as inducing a suspicion that they may have been deposited by way of equitable mortgage: it has even been held, on a sale of a public house in London, that their non-production amounted to notice to a mortgagee of such a deposit with the brewers who supplied the house (h). This decision has been disapproved of (i): and has been thought to depend upon the presumed notoriety of the practice of London publicans so to deposit their deeds, and upon the fact of the mortgagee having been aware that the publican was indebted to the brewers; in fact, the Court considered that there was wilful blindness, the security, having been taken for the repayment, not of a contemporaneous advance, but of a sum already due (k). The omission, however, to ask for the deeds is such gross negligence as is sufficient to deprive a purchaser for value, without notice of a prior incumbrance, of the protection of the legal estate (I), but it seems that " the negligence in cases of this nature which would render it unjust to deprive an earlier equitable incumbrancer of his priority must be carelessness of so aggravated a nature as to amount to the neglect of precautions which an ordinary reasonable man would have observed, and to indicate an attitude of mental indifference to obvious risks " (m).

May affect purchaser with notice of their deposit.

(cc) Inserted by L. P. (Amend.) Act, 1924.

(d) S. 144.

(e) See Annual Practice, Ord. XXXI. R. S. C. 1883.

(f) Ss 164, 174; Companies Act, 1929, ss. 204, 212, 214.

(g) See Re South Essex Estuary Co., (1869) 4 Ch. 215.

May deprive purchaser of protection of legal estate.

The L. P. Act, 1925, provides (n) that the Act "shall not prejudicially affect the right or interest of any person arising out of or consequent on the possession by him of any documents relating to a legal estate in land, nor affect any question arising out of or consequent upon any omission to obtain or any other absence of possession by any person of any documents relating to a legal estate in land."

(h) Whitbread v. Jordan, (1835) 1 Y. & C. 303. (i) See 4 Y. & C. 563; Sug. 14th ed. 767. (k) Jones v. Smith, (1843) 1 Ph. at p. 255.

(l) Oliver v. Hinton, 1899, 2 Oh. 264; 68 L. J. Ch. 563, and the cases there cited.

(m) Per Eve, J., in Hudston v. Viney, 1921, 1 Ch. 98; and see Grierson v. National Prov. Bank, 1913, 2 Ch. 18.

(n) S. 13.