There remains the third rule, that any stipulation which restricts or clogs the equity of redemption is void, or, as stated more broadly, that any provision which is repugnant either to the contractual or to the equitable right to redeem is void. A condition that if the contractual right is not exercised by the time specified the mortgagee shall have an option of purchasing the mortgaged property may properly be regarded as a penal clause, and it may be relieved against (h). It is repugnant only to the equitable and not to the contractual right. But a condition that the mortgagee is to have such an option for a period which begins before the time for the exercise of the equitable right has arrived, or which reserves to the mortgagee any interest in the property after the exercise of the contractual right, is inconsistent not only with the equitable but with the contractual right itself, and might perhaps be held invalid for repugnancy even in a court of law (i) "It is the right of a mortgagor on redemption, by reason of the very nature of a mortgage, to get back the subject of the mortgage, to hold and enjoy as he was entitled to hold and enjoy it before the mortgage. If he is prevented from doing so, that which he is entitled to on redemption is prevented, and to constitute such prevention it is not necessary that the subject of the mortgage should be directly charged with whatever causes the prevention. If he be so prevented in fact, the equity of redemption is affected by what, whether very aptly or not, has been always termed 'a clog' " (j).

(f) Santley v. Wilde, [1899] 2 Ch. 474; 16 L.Q.R. 7, 113 (Jan., April, 1900). The correctness of this decision has been called in question because in the mortgage it was provided that the share in the profits of the theatre was to be paid until the end of the leasehold term, and not merely during the existence of the mortgage: Noakes & Co. v. Rice, [1902] A.C. 24, at pp. 31, 34. But see Kreg-linger v. New Patagonia, etc., Co., [1914] A.C. 25, at p. 56.

(g) Potter v. Edwards, 1857, 26 L.J.Ch. 468; Marquess of Northampton v. Pollock, 1890, 45 Ch.D. 190, at p. 212 (S.C. sub worn. Salt v. Marquess of Northampton, [1892] A.C. 1); Eyre v. Wynn-Mac-kenzie, [1894] 1 Ch. 218, at p. 227; Gardiner v. Munro, 1896, 28 O.R. 375; Farrell v. Caribou Gold Mining Co., 1897, 30 N.S.R. 199; Buchanan v. Harvie (No. 2) 3 N.B. Eq, 61. The distinction drawn in Phillips v. Prout, 1898, 12 M.R. 143, between a bonus or commission agreed to be paid and one which is deducted at the time of the advance or afterwards paid by the mortgagor does not seem to be well founded. As to the costs which a mortgagee may charge against the mortgagor, see chapter 30, Costs.

(h) Vernon v. Bethell, 1762, 2 Eden 110, at p. 113; Fallon v. Keeman, 1866, 12 Gr. 388; Arnold v. National Trust Co., 1912, 5 A.L.R. 214, 7 D.L.R. 754.

In Noakes & Co. v. Rice (k) a mortgage of a leasehold public-house by a licensed victualler to brewers contained a covenant by the mortgagor that he and all persons deriving title under him should not during the continuance of the leasehold term, and whether any money should or should not be owing on the mortgage, use or sell in the house any malt liquors except such as should be purchased from the mortgagees. It was held that this covenant was a "clog" on the equity of redemption, and that the mortgagor, on payment of all that was owing on the security, was entitled to have a reconveyance of the property, or at his option a transfer of the security, free in either case from the tie (I).

(i) Kreglinger v. New Patagonia, etc., Co., [1914] A.C. 25, at p. 50.

(j). Browne v. Ryan, [1901] 2 I.R. 653, Andrews, J., at pp. 667, 668, quoted with approval and adopted by Collins, M.R., in Jarrah Timber and Wood Paving Corporation v. Samuel, [1903] 2 Ch. 1, at p. 7 (S.C. [1904] A.C. 323, sub nom. Samuel v. Jarrah, etc.); cf. Strahan, Law of Mortgages, 2nd ed., 29 ff.; notes in 2 W. &. T.L.C. Eq. 20 ff. to Howard v. Harris, 1683, 1 Vern. 190.

(k) [1902] A.C. 24.

In Bradley v. Carritt (m) the holder of the majority of shares of a company mortgaged his shares as security for an advance of money and at the same time covenanted that he would always thereafter use his best endeavors to secure that the mortgagee should be employed as a broker for the sale of the company's teas and that, in the event of any of such teas being sold otherwise than through the mortgagee, the mortgagor should pay to the mortgagee the commission which the mortgagee would have earned if the teas had been sold through him. The mortgage was paid off and the company changed its broker. The quondam mortgagee brought an action against the mortgagor for breach of the covenant. The House of Lords held by a majority of three to two, reversing the Court of Appeal, that the covenant was invalid because, although it did not operate in rem or as a charge on the shares, its effect was permanently to fetter the mortgagor in the free enjoyment and disposition of the shares. The true ground of the decision was that the covenant was repugnant to the contractual as well as the equitable right of the mortgagor on redemption to get his property back intact (n).

(I) But the opinion of Lord Davey at p. 34 that the mortgagee cannot stipulate for any payment which is to fall due after the principal is repaid is dissented from by Lord Parker of Waddington in Kreglinger v. New Patagonia, etc., Co., [1914] A. C. 25, at p. 58, as being the reassertion in a modified form of the rule against stipulating for a collateral advantage which prevailed prior to the repeal of the usury laws. See also Pollock's observations in 16 L.Q.R. 113, 322, (April, October, 1900).

(m) [1903] A.C. 253.

(n) There was room for difference of opinion on the question whether the repugnancy existed in fact, but the dicta expressed by Lord Macnaghten and Lord Davy that a stipulation for a collateral advantage to endure after redemption is necessarily invalid are dissented from in Kreglinger v. New Patagonia, etc., Co.,[1914] A.C 25, at pp. 43, 60.