Precautions to be observed on purchase of estate in mortgage.

(k) Clark v. May, (1852) 16 Beav. 273; 22 L. J. Ch. 302. (l) See judgment of Jessel, M. R., in Lord Egmont v. Smith, (1877) 6 Ch. D. at p. 474; 46 L. J. Ch. 356. (m) Sharp v. Richards, 1909, 1 Ch. 109.

Under a contract for the purchase from a mortgagor of his mortgaged estate, free from incumbrances, the purchaser, with the concurrence of the mortgagee, may so take his conveyance as to keep the mortgage on foot; but he must procure his vendor to be discharged from all liability, and pay any extra expense which may be occasioned by taking the conveyance in that form (o).

His right to keep mortgage debt on foot.

By s. 42 (4) (iii) of the L. P. Act, 1925, it is provided that if the contract for the sale or exchange of land is an entailed interest in possession, and the vendor has power to vest in himself (oo) or in the purchaser the fee simple in the land (or, if the entailed interest is an interest in a term of years absolute, such term), or to require the same to be so vested, the contract shall be deemed to extend to the fee simple in the land or the term of years.

Entailed land.

The L. C. C. Act, 1845, and the earlier railway and other similar Acts, contain statutory forms of conveyance to the several companies; the use of these forms, in preference to the ordinary instruments of assurance, is not obligatory: but inasmuch as an extraordinary efficacy (p) is given to conveyances made according to the statutory form, or as near thereto as the circumstances of the case wil admit, it seems to be desirable to frame the assurances as much upon the model of the statutory form as may conveniently be (q).

Statutory forms of railway conveyances.

(n) Hughes v. Britannia, etc. 800., 1906, 2 Ch. 607, 611. (o) Cooper v. Cartwright, (1860) John. 679. (oo) See Re Alefounder, 1927, 1 Ch. 360.

(p) L. C. C. Act, 1845, a. 81; see L. P. Act, 1925, s. 42 (7). (q) See He General Cemetery Co., (1856) 2 Jur. N. S. 972; 25 L. J. Q. B. 342.

By s. 42 (7) of the L. P. Act, 1925, it is provided that where a purchaser has power to acquire land compulsorily, and a contract, whether by virtue of a notice to treat or otherwise, is subsisting under which title can be made without payment of the compensation money into Court, title shall be made in that way unless the purchaser, to avoid expense or delay, or for any special reason, considers it (expedient that the money should be paid into Court.

Upon a sale in many lots of an estate subject to an incumbrance which is to be paid off out of the purchase-money, expense may be saved by taking a release to the vendor, instead of making the incumbrancer concur in the several conveyances: and this, when the parties are on good terms, is usually acceded to; though it might probably be resisted, either by a purchaser, or by the incumbrancer.

Incumbrances upon sale in lots to be got in by separate deed.

Where, as is often desirable, a subsisting incumbrance is to be kept on foot for the purchaser, the more prudent course appears to be not to rely on a mere declaration of intention, but to let the sum itself, and also the term of years, if there is one for securing it, be assigned to a trustee for the purchaser: or to let a declaration of trust be executed by the incumbrancers (r), and the legal owner of the term. But the old rule that a mere declaration that the incumbrance is to be kept on foot will, of itself, prevent a merger (s) now applies only in favour of limited owners (ss).

Incumbrances, how to be kept on foot for purchaser's benefit.

The vendor cannot require the property to be conveyed subject to covenants and conditions not appearing in the abstract (t); nor to obligations which, though appearing on the abstract, are not mentioned in the particulars or conditions (u).

(r) See Medley v. Horton, (1844) 14 Si. at pp 226, 229; 13 L. J. Ch. 442; Watts v. Symes, (1849) 16 Si. 640; but see S. C, (1851) 1 D. M. & G. 240; 21 L. J. Ch. 713. See, on the same subject, Fisher on Mortgages, 6th ed. para. 1539 et seq.; Coote on Mortgages, 9th ed. p. 1444 et seq.; and consider L. P. Act, 1925, s. 116.

(s) Jameson v. Stein, (1855) 21 Beav. 5, 13; Adams v. Angell, (1877) 5 Ch. D. 634, at p. 646; Thome v. Cann, 1895, A. C. 11.

(ss) L. P. Act, 1925, s. 116.

(t) Re Monckton and Gilzean, (1884) 27 Ch. D. 555.

(u) Hardman v. Child, (1885) 28 Ch. D. 712; Re Wallis and Barnard, 1899, 2 Ch. 515.

It is generally inexpedient, and, eventually, false economy, to comprise several distinct estates or matters in a single deed.

Separate deeds for separate matters, etc.

The assignment of satisfied terms has been rendered unnecessary or impracticable since the passing of the Satisfied Terms Act, 1845 (now the L. P. Act, 1925). Under s. 5 of the L. P. Act, 1925 (which takes the place of the Satisfied Terms Act, 1845), where the purposes of a term of years created out of freehold land become satisfied either before or after the commencement of the Act (whether or not that term, either by express declaration or by construction of law, becomes attendant upon the freehold reversion (x)), it is to merge in the reversion and cease accordingly (sub-s. (1)). And where the purposes of a term of years created out of leasehold land become satisfied after the commencement of the L. P. Act, 1925, such term is to merge in the reversion expectant thereon and cease (sub-s. (2)) (y). ,Where the purposes are satisfied only as respects part of the land comprised in a term, the section is to have effect as if a separate term had been created in regard to that part of the land (sub-s. (3)).

Act for merger of satisfied terms.

Schedule I., Part II., of the Act provides that where the purposes of a term created out of leasehold land are satisfied at the commencement of the Act, such term is to merge in the reversion expectant thereon and to cease accordingly,, but where the term was vested in the owner of the reversion, such merger and cesser are to take effect without prejudice to any protection which would have been afforded to the owner of that reversion had the term remained subsisting. Where the purposes are satisfied only as respects part of the land, this provision is to have effect as if a separate term had been created in regard to such part.

It will be observed that the reservation or protection contained in the Act of 1845 in respect of terms created out of freehold land which were satisfied at the date when that Act came into force is not repeated ,in the L. P. Act, 1925. Protection is, however, afforded in respect of terms created out of leasehold land which were satisfied on the 1st January, 1926, and became merged under the L. P. Act, 1925,. See 1st Sched., Part II., para. 1, abstracted above.

(x) The words within brackets are new.

(y) This sab-section disposes of the difficulty which arose in Re Moore-and Hulme, 1912, 2 Ch. 105.

It may now be considered settled that a term did not become satisfied, within the meaning of the Act of 1845, unless the beneficial interest in the whole charge secured by the term, and the beneficial interest in the whole estate, are united and merged in one person (z).

Doe v. Jones.