This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
The L. C. C. Act, 1845, enables the promoters of an undertaking who have purchased land, upon the discovery at any time of the existence of any outstanding estates or interests therein, which through mistake or inadvertence they have failed to purchase or pay compensation for, to purchase or pay compensation for the same without disturbance to their possession (q).
Provision in L. C. C. Act, 1845, for purchase of omitted interests.
Where an estate was devised to A., subject to the payment of a legacy - which was held to charge only the estate, and not A. personally - and A. sold the estate to B. with notice of the legacy, but without any reduction of purchase-money being made in respect thereof (the parties having determined that the charge was, upon technical grounds, inoperative), it was held that the legatee could not treat A. as a trustee in respect of so much of the purchase-money as would answer the legacy (r).
Estate sold subject to charge known, but treated as invalid, incumbrancer has no claim on vendor.
(o) See sup. p. 143.
(p) See sup. p. 823.
(q) See ss. 124 - 126; Thomas v. Barry Bock Co., (1889) 5 T. L. R. 360 ; Hyde v. Manchester Corp., (1852) 5 De G. & S. 249. As to the effect of a conveyance of copyholds according to a form prescribed in a private Act, see Grand Junction Canal Co. v. Bimes, (1846) 15 Si. 402 ; 16 L. J. Ch. 148. See also Jepson on L. C. Acts, 2nd ed. 326, 327.
(r) Jillard v. Edgar, (1849) 3 De G. & S. 502 ; and see Newman v. Kent, (1818) on app. ib. 510 ; reported below, 1 Mer. 241.
It was long considered that where a mortgagee purchased and took a conveyance to himself of the equity of redemption, he thereby let in all intermediate incumbrances of which he had notice (s) ; unless the property was conveyed to a trustee, for the express purpose of keeping the charge alive (t). But the doctrine has been disapproved and is no longer binding (u) ; in every case the question of merger must now be treated as simply one of intention, whether expressed or to be implied by the surrounding circumstances of the case (x). If a charge is paid off by a tenant for life, without any expression of his intention, he retains the benefit of it against the inheritance, on the ground of presumed intention, an intention which is not rebutted by the mere fact of the relationship of parent and child existing between the tenant for life and remainderman (y). Where, as in the case of an owner in fee paying off the charge, there is no reason for keeping it alive, Equity will destroy it; but if there is any reason for keeping it alive, such as the existence of another incumbrance, Equity will not destroy it. If without going through the ceremony of the assignment to a trustee for the purchaser of the equitable charge - an assignment which really passes nothing - a declaration is inserted in the deed that the charge shall be treated as remaining on foot, then the charge is treated as remaining on foot (z). If no intention is expressed or implied, then it is still true, as was said in Touhnin v. Steere, that the incumbrance which was paid off is merged, and the subsequent incumbrancers are let in (a).
Effect of conveyance of equity of redemption to mortgagee.
(s) Greswold v. Mar sham, (1685) 2 Ch. Ca. 170 ; Brown v. Stead, (1832) 5 Si. 535; 2 L. J. N. S. Ch. 45 ; and see Toulmin v. Steere, (1817) 3 Mer. 210 ; Smith v. Phillips, (1837) 1 Ke. 694 ; Squire v. Ford, (1851) 9 Ha. at p. 60 ; Til-desley v. Lodge, (1857) 3 Sm. & G. 543 ; Chesshyre v. Biss, (1860) 2 Gif. 287.
(t) Bailey v. Richardson, (1852) 9 Ha. 734 ; and see Watts v. Symes, (1851) 1 D. M. & G. 240, 243 ; 21 L. J. Ch. 713; Davis v. Barrett, (1851) 14 Beav. 542 ; and also the third point decided in Mocatta v. Murgatroyd, (1717) 1 P. W. 393.
(u) Adams v. Angell, (1877) 5
Ch. D. 634, 645 ; 46 L. J. Ch. 352;
Thome v. Cann, 1895, A. C. 11, 16 ;
64 L. J. Ch. 1 ; Liquidation Estates Purchase Co. v. Willoughby, 1896, 1 Ch. 726; 1898, A. C. 321 ; 65 L. J. Ch. 486; 67 ib. 251.
(x) Thorne v. Cann, sup.
(y) Re Harvey, 1896, 1 Ch. 137;
65 L. J. Ch. 370.
(z) See cases cited supra; and further as to what will create a sufficient presumption of intention, Hayden v. Kirkpatrick, (1865) 34 Beav. 645; Phillips v. Guttcridgc, (1859) 4 D. & J. 531 ; Re Pride, 1891, 2 Ch. 135 ; 61 L. J. Ch. 9 ; Liquidation Ests. Co. v. Willoughby, 1898, A. C. 321 ; 67 L. J. Ch. 251 ;
If a mortgagee surrenders his security to the trustee in bankruptcy of the mortgagor, the effect is not to merge the security in the equity of redemption which is vested in the trustee, but to place the trustee for all purposes in the position of the original mortgagee, as against other incumbrancers (b). And the case is the same, where the trustee purchases the security of a mortgagee (c).
Surrender by mortgagee to mortgagor's trustee in bankruptcy.
If a mortgagor purchase from his first mortgagee, selling under his power of sale, he takes the property subject to any subsequent incumbrances which he himself may have created (d).
Mortgagor buying from his first mortgagee cannot defeat mesne incumbrancers.
If a mortgagee having no power of sale, foreclose, and then fairly sell the estate for less than the amount due to him, he cannot afterwards recover from the mortgagor, upon his collateral personal security, the amount remaining unsatisfied (?) ; but the principle of this decision, i.e., that the action would open the foreclosure (f), does not apply to the case of a sale under the usual power or trust. And the mere attempt to sell will not, in Equity, disentitle the mortgagee to prove against the mortgagor's estate in an administration action; but he will not be allowed the costs of the foreclosure (g) ; and, of course, not of the attempted sale.
Mortgagee selling after foreclosure.
Chetwynd v. Allen, 1899, 1 Ch. 353; 68 L. J. Ch. 160 ; Ingle v. Yaughan Jenkins, 1900, 2 Ch. 368; 69 L. J. Ch. 618 ; Thellusson v. Liddard, 1900, 2 Ch. 635 ; 69 L. J. Ch. 673 ; Capital and Counties Bank v. Rhodes, 1903, 1 Ch. 631 ; 72 L. J. Ch. 336; Re French-Brewster's Settl., 1904, 1 Ch. 713; 73 L. J. Ch. 405.