If the owner of freehold or leasehold land deposits his title deeds with another person for the purpose of securing the repayment of an advance, an equitable charge is created, and, notwithstanding the Statute of Frauds, the purpose of the deposit may be shewn by oral evidence (i). Although, by reason of the prevalence of systems of registration of deeds and registration of titles in this country mortgages of this kind are foreign to our ordinary ideas, our law is the same as the English law with respect to such mortgages, and an equitable mortgage by deposit may be created notwithstanding that the legal title is outstanding in some person other than the depositor (j).

(b) Dundas v. Desjardins Canal Co., 1870, 17 Gr. 27.

(c) Vandelinder v. Vandelinder, 1864, 14 U.C.C.P. 129.

(d) Doe dem. Ross v. Papst, 1853, 8 U.C.R. 574.

(e) Banks v. Whittal, 1847, 1 DeG.& S. 536. (f) Smith v. Smith, 1835, 1 Y. & C, Ex. 338.

(g) Metcalfe v. Archbishop of York, 1836, 1 My. & Cr. 547. (h) In re Kelcey, Tyson v. Kelcey, [1899] 2 Ch. 530.

Lord Eldon, after having previously protested against the doctrine, acquiesced in it in 1813 as being settled law (k). The doctrine has been defended, not very satisfactorily, on various grounds including that of part performance (I).

A written memorandum duly signed containing an agreement to deposit deeds as security is a valid charge without a deposit (m), but an oral agreement for a deposit which is not performed is invalid (n). If there is a written memorandum the terms of the deposit must be ascertained solely by reference to the memorandum, but oral evidence may be given to shew a new agreement with respect to a subsequent advance (o).

(i) Russel v. Russel, 1783, 1 Bro. C.C. 269, 2 W. & T.L.C. Eq.

85, 18 R.C. 26.

(j) Zimmerman v. Sproat, 1912, 26 O.L.R. 448, 5 D.L.R. 452, and cases there cited. As to deposit of certificate of title under the Land Titles Acts, see Fialkowski v. Fialkowski, 1911, 4 A.L.R. 10. In Ontario the Land Titles Act, R.S.O. 1914, c. 126, s. 92, provides as follows:

92. Subject to any registered estates, charges, or rights, the deposit of the certificate of ownership in the case of freehold land, and of the office copy of the registered lease in the case of leasehold land for the purpose of creating a lien on the land to which such certificate or lease relates, shall be deemed equivalent to a deposit of the title deeds of the land.

(k) Ex parte Kensington, 1813, 2 Ves. & B. 79, 18 R.C. 30.

(l) Sec. 2 W. & T.L.C. Eq. 86-7; 18 R.C. 27; 21 Halsbury, Laws of England, 79; Ex parte Broderick, in re Beetham, 1887, 18 Q.B.D. 380, 766.

(m) In re Carter and Justins, Ex parte Sheffield Union Banking Co., 1865, 13 L.T. 477.

(n) In re Beavan, Ex parte Coombe, 1819, 4 Madd. 249, 20 R.R. 294.

Mere possession by a creditor of his debtor's title deeds is not sufficient to create an equitable mortgage without evidence as to the manner in which such possession originated (p). The creditor must shew that the deeds were in fact deposited with him by the debtor, and that the purpose was to create a charge, but if the deposit is proved, the purpose may in the absence of an express charge, be inferred from the circumstances (q).

The deposit must be made either with the creditor or with some third person over whom the debtor has no control (r).

In order to create an equitable charge by deposit of title deeds it is not necessary that all the deeds should be deposited (s). The charge may be good although the conveyance to the depositor is missing (t). Prima facie a deposit of deeds creates an equitable charge on all the property comprised in them (u).

If a deposit is made for the purpose of obtaining credit, it will not cover money previously advanced and then due

(o) Ex parte Kensington, supra; Shaw v. Foster, 1872, L.R. 5 H. L. 340.

(p) Dixon v. Muckleston, 1872, L.R. 8 Ch. 155; Wardle v. Oakley, 1864, 36 Beav. 27.

(q) 2 Wh. & T.L.C. Eq. 94; 21 Halsbury, Laws of England, 80.

(r) A deposit with the debtor's wife for the creditor is not sufficient. Ex parte Coming, 1803, 9 Ves. 115, 18 R.C. 44. But a deposit with the debtor's wife for her own benefit is sufficient. In re Wallis, Ex parte Jenks, [1902] 1 K.B. 719. A deposit with the debtor's solicitor is sufficient. Lloyd v. Attwood, 1859, 3 DeG. & J. 614, 652.

(s) Ex parte Wetherell, 1805, 11 Ves. 398, 18 R.C. 35; Acme Co. v. Huxley, 1912, 4 A.L.R. 63 (deposit of transfer without duplicate certificate of title).

(t) Roberts v. Croft, 1857, 2 DeG. & J. 1. It follows that several valid equitable mortgages might be created by successive deposits of different deeds. Cf. Dixon v. Muckleston, 1872, L.R. 8 Ch. 155.

(u) Ashton v. Dalton, 1846, 2 Coll. 565, 18 R.C. 40. See further 2 Wh. & T.L.C. Eq., 98-9, as to the property covered by the mortgage.

(v), unless the intention to cover the past due indebtedness appears from the circumstances (w).