A few words may be added on the investigation of title in view of taking a mortgage of land. When it is proposed to obtain a loan of money on the security of a mortgage of land, the title is usually investigated even more strictly than on a sale (z): but the parties stand in a very different position from that of a vendor and purchaser. In the first place, it is not usual for persons proposing to lend money on a mortgage of lands to bind themselves by contract to make the loan (a). They are, therefore, generally in a position to exact any evidence of title which they may choose to demand, as they can at any time decline to proceed with the transaction, if the title produced is in any respect insufficient. They should, however, before commencing the investigation of the title to the lands proposed to be mortgaged or incurring any other trouble or expense in the matter, be careful to stipulate expressly that the mortgagor shall pay all their costs and expenses of and incident to the transaction proposed in any event, whether they choose to make the loan or not. For although the regular course of practice, where a mortgage is completed, is for all costs incurred by the mortgagee in investigating the title, valuing the land, and otherwise preparing for the loan, to be paid by the mortgagor (b), yet where the parties are not bound to each other by any contract, there is no obligation on the mortgagor to discharge such costs, if the loan be not made (c). Unless, therefore, an intending mortgagee make the above-mentioned express stipulation, he runs the risk of being out of pocket by the transaction, if he should be obliged to decline the loan on account of some defect in the title. If an agreement should be made that one shall lend and another borrow money on mortgage of some particular land, it is not an implied term of the contract that the borrower shall prove his title to the land for the last sixty or forty years, or any other particular period; as the transaction of borrowing implies that securities of every degree of safety may be made available, any risk run with regard to the title being compensated by the terms agreed upon as to the rate of interest to be paid or otherwise (d). It is not, therefore, a breach of such a contract for the borrower to fail to show a good marketable title to the land: although the contract would appear to be broken if the borrower should fail to produce any property of his corresponding with that described in the contract.

Investigation of title in view of mortgage. .

(u) See Bedford v. Trustees of British Museum, 2 My. & K. 552; Sayers v. Collyer, 28 Ch. D. 103.

(x) Hepworth v. Pickles, 1900, 1 Ch. 108.

(y) Above, p. 434, and n. (f).

(z) Wms. Real Prop. 449, 13th ed.; 596, 21st ed.

(a) Davidson,Prec. Conv. vol. ii. pt. i. p. 104, n. (a), 4th ed.

(b) If the loan be made without such costs being paid, they cannot be added as mortgagee's to the security:but they are recoverable by the mortgagee from the mortgagor personally under an implied contract of indemnity: Wales v. Carr, L902, 1 Ch. S60.

(c) Rigley v. Dayton, 2 Y. & J. 83; Wilkinson v. Grant, 18 C. B. 319; Melbournt v. Cottrrell, 5W.R. 884, 29 L. T. 0. S. 293. But where the Court sanctioned a mortgage of an infant's estate, and the matter went off without the proposed mortgagee's default, he was allowed his costs of in-vestigating the title out of the infant's estate: Craggs v. Gray, 35 Beav. 166.

(d) Melbourne v. Cottrell, ubi sup.; and see National Provincial Bank of England v. Games, 31

Ch. D. 582.

32 (2)

The Court will not, however, specifically enforce a contract to lend money on mortgage of some particular property at suit of either the borrower or the lender (e); unless the money should have been first actually advanced by the lender on the borrower's promise to give the particular security (f): but the person aggrieved by a breach of such a contract may recover damages proportionate to the loss he has sustained (g). It follows that, if an intending mortgagee of land should contemplate entering into a contract to make the loan, he should expressly stipulate that the borrower shall first show a good marketable title to the land to the satisfaction of the lender's counsel, that the lender shall be at liberty to rescind the contract if his counsel shall not accept the title, and that the borrower shall pay all the lender's costs (h) and expenses of and incident to the transaction in any event, whether the loan be made or not. If it be intended that the lender shall recover any compensation beyond expenses out of pocket in the event of the loan not being made, such as interest for his money whilst lying idle, this must be the subject of express stipulation (i).

In advising on title on behalf of an intending mortgagee, it must be remembered that the object of the transaction proposed is very different from that of a sale. Purchasers generally buy land with the view of occupying or enjoying it; they seldom buy it for immediate re-sale. But the object of a mortgagee is simply to obtain good security for the repayment of his money, whenever he may desire to call it in. And, assuming that the valuation of the land is satisfactory, what conduces most to this end is that he should be able at any time to exercise effectually his best and most convenient remedy, which is his power of sale. While purchasers, therefore, so long as they can obtain a good holding title, are often willing to waive defects of title which will be cured by lapse of time or may be covered by special conditions on a re-sale, a mortgagee will always desire to get a good marketable title; for he contemplates the possibility of having recourse to a forced sale, when special conditions, in spite of the avidity with which they are usually swallowed at the auction mart, may be depreciatory. The conveyancer advising an intending mortgagee should therefore see that his client will obtain a good marketable title, that is, a title under which the property can be put up for sale without any special conditions restricting the purchaser's rights, or which an unwilling purchaser under an open contract would be obliged to accept (k). As we have seen (l), an intending mortgagee is not usually bound, as a purchaser very commonly is, by any contract requiring him to accept less than a good marketable title. If it should be proposed that an intending mortgagee should accept a title less than this, the question, whether he may reasonably concede what is asked, should be determined by considering whether the suggested concession will practically hamper the exercise of his power of sale. And as a mortgagee on completion gets only a parchment security, and does not, like a vendor, enter into possession of the land, there is the more reason for seeing that the evidence of the mortgagor's title is in every respect complete. The title deeds especially should be examined with most particular care (m); for frauds and forgeries have been far more frequently effected in connection with the mortgage of land, where there is no transfer of the actual possession, than upon sale. As regards the evidence both of any facts material to the title and the identity of the premises, a mortgagee will, as a rule, require strict proof according to conveyancing practice (n). We have seen (o) that purchasers, who have to pay out of their own pockets the expense of procuring evidence not in the vendor's possession, often content themselves with informal evidence, or sometimes waive proof of such matters, especially where the vendor and his predecessors have long been known as the owners of the land. But an intending mortgagee cannot safely dispense with good evidence in these respects. With these differences, the investigation of title in view of a mortgage of land is carried out in like manner as upon a sale.

What title should be required on behalf of a mortgagee.

(c) Rogers v. Challis, 27 Beav. 175; Sichel v. Mosenthal, 30 Beav. 371; South African Territories, ltd. v. Wallington, 1897, 1 Q. B. 692, 1898, A. C. 309.

(f) Ashton v. Corrigan, L. R. 13 Eq. 76; Hermann v. Hodges, L. R. 16 Eq. 18; Taylor v. Eck-ersley, 2 Ch. D. 302.

(g) See Western Wagon, etc. Co. v. West, 1892, 1 Ch. 271, 277; South African Territories, Ltd. v. Wallington, ubi sup. Where the borrower under such a contract breaks off the transaction without reason, the lender can recover his solicitor's costs as damages: Car-ter v. Merrion, 32 L. T. N. S. 663.

(h) Where an intending borrower agreed to pay the lender's reasonable costs in case the loan went off, it was held that this did not include the commission charged by the lender's bankers for withdrawing his money from deposit: He Blakesley and Ber-wick, 32 Beav. 379.

(i) Sweet land v. Smith,3Tyrw. 491.

Good marketable title.

(k) Pyrke v. Waddingham, 10 Hare, 1. 8. (l) Above, p. 498.

Investigation of title prior to taking a transfer of a mortgage is, of course, governed by the same considerations as arise on a proposal for a new mortgage. On the transfer of a mortgage, made without the privity of the mortgagor, the transferee takes subject to the state of account then existing between the mortgagor and the mortgagee (p). And if the transferee omit to give to the mortgagor notice of the transfer, he will not be entitled to hold his legal estate in the mortgaged property as security for any sums of money paid since the transfer by the mortgagor to the original mortgagee on account either of interest or principal (q). A transfer of a mortgage cannot therefore be safely taken from the mortgagee alone without first inquiring of the mortgagor as to the state of the mortgage debt and the interest thereon and obtaining a favourable reply, and giving notice of the transfer to the mortgagor. In practice the mortgagor is always made a party to a transfer of the mortgage whenever his concurrence can be procured (r).

Transfer of mortgage.

(m) See above, pp. 143, 144. (n) Above, pp. 131 sq., 143. (o) Above, p. 142. (p) Matthews v. Wallwyn, 4

Ves. 118; cf. Bickertonv. Walker, 31 Ch. D. 151; Bate/nan v. Hunt, 1904, 2 K. B. 530.

(q) Williams v. Sorrell, 4 Ves. 389; Re Lord Southampton's Estate, 16 Ch. D. 178, 185, 187; Turner v. Smith, 1901, 1 Ch.

213; see Dixon v. Winch, 1900, 1 Ch. 736.

(r) See Davidson, Prec. Conv., vol. ii. part ii. p. 264, 4th ed.