This section is from the book "A Treatise On The Law Of Vendor And Purchaser Of Real Estate And Chattels Real", by T. Cyprian Williams. Also available from Amazon: A treatise on the law of vendor and purchaser of real estate and chattels real.
G.. 857, 872; Gibson v. Seagrim, 20 Beav. 614; Kay, L. J., Mint v. Howard, 1893, 2 Ch. 54, 72; Re Jones, 1893, 2 Ch. 461, 470 sq.
(e) See Dolphin v. Aylward, L. R. 4 H. L. 486, 501; Flint v. Howard, 1893, 2 Ch. 54, 61, 72, 73.
(f) Barnes v. Raester, 1 T. & C. C. C. 401, 410; Burden v. Bignold, 2 Y. & C. C. C. 377;
Stronge v. Hawkes, 4 De G. & J. 632, 641, 651 - 653; Wellesley v. Mornington, 17 W. R. 355; Moxon v. Berkeley, etc. Bdg. Socy., 59 L. J. Ch. 524, 526; Flint v. Howard, 1893, 2 Ch. 54; Wood v. West, 40 Sol. J. 114; Baglioni v. Cavalli, 49 W. R. 236.
(g) See note (c) to p. 483, above.
C. would be entitled to the balance after satisfying the remainder of B.'s charge. But if before the sale of Blackacre A had sold Whiteacre to D., then in adjusting the equities between C. and D. after the sale of Blackacre, the paramount charge of 2,100/. would have to be apportioned between Blackacre and Whiteacre according to their values, 1,400l. being attributed to Blackacre and 700l. to Whiteacre, and C. would only be entitled to stand in B.'s place as regards Whiteacre in respect of the 700/. so apportioned. Out of this sum B. would first take his remaining 100/., then C. would have b00/. and subject thereto Whiteacre or the proceeds of sale thereof would belong to D. (h). It does not appear that in these cases the rights of the assignees are altered by the circumstance that the second assignee took with notice, either express or implied, of the first assignment (/): but the second assignment may of course be made on the terms that the assignee shall take subject to the satisfaction or full enforcement of the first assignee's right to have the property assigned to him entirely exonerated from the paramount charge, and if so, the second assignee's rights will be determined by such agreement (k). It seems, however, that if the paramount charge were a legal mortgage and either assignee should get it in, the parties' rights might be varied by the doctrine of tacking (/). Thus in the ' example given, if D. had purchased Whiteacre without racking.
(h) See cases cited in the last note but one.
(i) See Kay, L. J.. Flint v. Howard, 1893, 2 Ch. 54, 73. and other cases cited in the last note hut two. It is thought that these authorities have overruled the doctrine laid down in Hamilton v. Royse, 2 Sch. & Lef. 315, 327 - 329. and Aicken v. Macklin, 1 Dru. & Walsh, 621, 634, 635, that, where the second assignee takes with notice of the first assignment, or subject generally to all equities previously created, he takes subject to the first assignee's original equity to marshal. It is thought that the propositions stated in Dart, V. & P. 914. 5th ed. (1035, 6th ed., and still retained, 947, 7th ed.), in reliance on these oases cannot now he maintained.
(k) See Be Mower's Trusts, 1. R 8 Eq. 110.
(l) Above, pp. 477. 479, 480.
Since the repeal of the Usury Laws (o), any rate of interest that the parties may agree to may be taken on a mortgage debt and secured on the mortgaged property; a commission stipulated for by the mortgagee and deducted from the loan will, in the absence of any fraud or undue influence, be allowed in taking the accounts (p); and agreements for charging compound interest, or capitalising interest which may fall into arrear, are no longer invalid (q). The Court however strenuously upholds the rules that no stipulation forming part of a contract or transaction of mortgage, that the security shall not be redeemable according to the rules of equity, shall have any effect in equity (r); and that any agreement to fetter the equity of redemption with some other condition than the payment of the principal, interest and costs due under the mortgage is invalid (s). It may be mentioned here that, under the Moneylenders Act, 1900 (t), a mortgage of land to a moneylender (u) is void, if not made to him in his registered name (x) or if in other respects the transaction were not carried out in conformity with the requirements of the Act (y).
Interest now chargeable on a mortgage.
Mortgage cannot be made irredeemable.
(m) See note (z) to p. 483, above.
(n) Titley v. Davies, 2 Eq. Ca. Abr. 604, pi. 35, 36, 2 Y. & C. 0. C. 383, n., 393 - 395; Sober v. Kemp, 6 Hare, 155; Liverpool Murine Credit Co. v. Wilson, L. R. 7 Ch. 507. 512; Flint v. Howard, 1893, 2 Ch. 54, 68, 69; Dart, V. & P. 914, 915, 5th ed.; 1036, 6th ed.; 947, 948, 7th ed.
(o) By stat. 17 & 18 Vict. c. 90; see Wms. Real Prop. 545, n. (e), 21st ed.
( p) Mainland v. Upjohn, 41 Ch. D. 126. As to undue influence, see below, Chap. XIV. Sec. 2.
(q) Clarkson v. Henderson, 14 Ch. D. 348; Davidson, Prec. Conv. vol. ii. pt. ii., p. 360, n., 4th ed.; Mainland v. Upjohn, 40 Ch. D. 126, 136, 142, 143; Wrigley v. Gill, 1906, 1 Ch. 165. In the absence of agreement to the contrary, simple interest only is chargeable in respect of a mortgage debt carrying interest; Daniel! v. Sinclair, 6 App. Cas. 181; Ainsworth v. Wilding, 1905, 1 Ch. 435.
Equity of redemption not to be clogged.
Mortgages to moneylenders.
(r) Price v. Perrie, 2 Freem. 258; Salt v. Northampton, 1892, A. C. 1. Thus a stipulation in the mortgage contract that the mortgagee shall or may purchase the mortgaged property is void; Samuel v. Jarrah, etc. Corpn., 1904, A. C. 323. But the mortgagee may by an agreement made subsequently to the mortgage purchase the equity of redemption; Reeve v. Lisle, 1902, A. C. 641; above, pp. 481, 482. (s) Jennings v. Ward, 2 Vein. 520: James v. Kerr, 40 Ch. D. 449, 459 (agreement for subsequent payment of a bonus to the mortgagee held void); Field v. Hopkins, 44 Ch. D. 524 (agreement for adding to the security a solicitor-mortgagee's profit costs held void; since allowed by stat. 58 & 59 Vict. c. 25); Noakes & Co., Ltd. v. Rice, 1902, A. C. 21 (covenant on mortgage of a leasehold public-house to take beer during the term from the mortgagee only held not to bind the mortgagor after redemption); Bradley v. Carritt, 1903, A. C. 253 (agreement on mortgage of shares in a tea company that the mortgagee should have the sale of all the company's teas as broker held no longer binding after redemption); British South Africa Co. v. Be Beers, etc. Ltd., 1910, 1 Ch. 354 (agreement to grant an exclusive licence to the mortgagee to work certain diamondiferous ground held void as a fetter on the equity of redemption); Morgan v. Jeffreys, 1910, 1 Ch. 620 (stipulation that the mortgage should not be paid off for twenty-eight years without the consent, of the mortgagee held void). Cf. Biggs v. Hoddi-nott, 1898, 2 Ch. 307, where on a mortgage of an hotel to a brewer covenants to take beer from the mortgagee only during the con-tinance of the security and for the continuance of the loan for five years were upheld; Santley v. Wilde, 1899, 2 Ch. 474 (where an agreement to pay to the mortgagee of a leasehold theatre one-third of the profit rental thereof during the term was held valid by the C. A.). The latter decision was however criticised adversely in Noakes & Co., Ltd. v. Rice, 1902, A. C. 24, 28, 31, 32, 31; and Bradley v. Carritt, 1903, A. C. 253, 255 sq.
(t) Stat. 63 & 64 Vict. c. 51, s. 2 (1).
(n) See sect. 6; Sadler v. Whiteman, 1910, 1 K. B. 868, reversed, 1910, W. N. 193.
(x) Chapman v. Michaelson, 1908, 2 Ch. 612, 1909, 1 Ch. 238; see also Bonnard v. Dott, 1906, 1 Ch. 740: Staffordshire Financial Co. v. Valentine. 1910, 2 K. B. 233; and cf. Lodge v. National Union Investment Co., 1907, 1 Ch. 300.
(y) See Gadd v. Provincial Union Bank. 1909, 2 K. B. 353; reversed, nom. Kirkwood v. Gadd, 1910, A. C. 422; Jackson v. Price, 1910, 1 K. B. 143; Re Seed, ib. 661; Re a Debtor No. 2 of 1910), 1910, W. N. 70; Rueter v. Bradford Advance Co.. 26 Times L. R. 533.