in the second mortgage.]-Now this cannot be a Welsh mortgage, because by it the money has been made payable whenever the mortgagee required it, and the security given is for payment of the money when demanded; and if that be done, then the mortgagor may require the property to be re-conveyed to him. But the essence of a Welsh mortgage is, that as the estate has been conveyed for the purpose of paying the debt, by that conveyance you have got all that you contracted for, and there can be no forfeiture, because the principal is not payable at all. Here it is made payable at any time, whenever the money is demanded the mortgagor covenants to pay it, and when the money is paid the mortgagee covenants to re-convey the estate. Now, would it not seem extraordinary that if the money was paid upon demand the mortgagor should be entitled to a re-conveyance of the estate, but that if the money was not paid upon demand, the mortgagee should not have the benefit of his security? The covenant by the mortgagor is to pay the money absolutely whenever demanded, with a proviso that whenever the money was paid the mortgagee should re-convey. It is an inaccurate mortgage, but it is not a Welsh mortgage, nor does it resemble one; it provides only for one of two events, namely, the mortgagor paying the money upon demand; but it does not provide for the other event, namely, the money not being paid when demanded. It appears to me that it has not a single characteristic of a Welsh mortgage; but, as I stated, I shall look into the case before Lord Lyndhurst, and dispose of this case in the morning. As to the plaintiff's not having offered to redeem the prior mortgagee, I shall inquire into the practice respecting that point. I take it for granted, however, that as the prior mortgagee did not demur, he cannot raise the objection at the hearing. In England, where the course is to foreclose the mortgagor, a mortgagee would have a clear right to say that a subsequent encumbrancer should not bring him before the Court except for the purpose of redeeming him. But in this country, where the estate is sold, there is not the same ground for the objection; however, the prior mortgagee has still a right to say that you should not take away his security from him without paying him his debt, but then he should raise the objection by demurrer. If you demur, then you enable the other party to set his pleading right at a trifling expense: but if you lie by, you put him unnecessarily to the expense of a fruitless hearing, and I should not be disposed to encourage any objections of that kind at the hearing, when they might have been taken advantage of by demurrer. The LORD CHancellor. In that case of a mortgage which was before me yesterday, I have looked at the deed and at that case of Teulon v. Curtis, before Lord 1842. Chancery. BALFE v. LORD. June 1. 1842. Chancery. BALFE บ. LORD. Lyndhurst. By the deed, the borrower covenants to pay the money whenever it should be demanded, and the lender covenants to re-convey the estate when the money should be paid. It is said that this is a Welsh mortgage, but I cannot see that it bears any resemblance to such a conveyance. The true nature of a Welsh mortgage is that it is a conditional sale, that is, that the lender is to receive the rents without limit, and whenever the borrower chooses to redeem he may do so, and upon payment of the money the mortgagee must re-convey, and he cannot foreclose a mortgage of that description, because there is no forfeiture at law. Here there is no proviso that the mortgagor shall receive the rents, but it is in effect an inaccurate mortgage. There is a covenant on the one hand by the mortgagor to pay the money on demand, and there is a covenant on the other hand by the mortgagee whenever the money is paid that he will re-convey the estate. Now, in construing this instrument, must I not understand when the borrower covenants for payment of the money whenever it shall be demanded, and the mortgagee covenants that whenever the money is paid he will re-convey, that the latter covenant has relation to the former, and that when the parties speak in the second covenant of the payment of the mortgage money, they mean a payment according to the first covenant, that is, a payment upon demand? What the mortgagee covenanted to do was to re-convey, if the money were paid upon demand, and, therefore, it would seem to follow that if the money were not paid upon demand, he was not to re-convey. Therefore, upon a demand of the money, if it were not paid, there was a forfeiture, and consequently an equity of redemption; and it is quite clear, therefore, that it is simply a mortgage, and that the mortgagee is entitled to file a bill for the foreclosure of it. The case of Teulon v. Curtis was this: the mortgagor demised the lands to the mortgagee for a term of 500 years to commence upon the death of a certain party, and there was a proviso that the term should cease upon payment of the money at any time. There was a covenant, as in this case, by the mortgagor for payment of the money upon demand, and also a covenant that if the money were not paid, it should be lawful for the mortgagee to hold and enjoy the property until he was paid. The Chief Baron considered that the two covenants were not inconsistent: that is, that a man might very naturally convey an estate to another as a security for a sum of money borrowed, without fixing any time at which the lender was to be entitled to raise it out of the estate, and yet that the borrower might covenant personally to repay it upon demand. A man borrowing money may say to the lender "I give you "my personal obligation for payment of the money whenever you call for "it, and yet I choose to convey a particular estate as a security for the "payment of it by receipt of the rents and profits:" and certainly the two things are not inconsistent. In that case there was a stipulation in the deed, that if the money were not paid the mortgagee should enter into receipt of the rents and profits, and that gave it, in some degree, the character of a Welsh mortgage. At the same time, that case might be open to this consideration, that although the mortgagee was to enter immediately, yet, as the term vested in him was in reversion expectant upon a preceding life estate, so that the entry of the mortgagee was not to take place immediately, but at some future period; that future period might be said to be the occurring of a default in payment of the money. It is quite consistent for the mortgagor to say "I will repay the money on demand," and, at the same time to say, "If I do not pay upon demand, then you shall be at liberty to enter into my land:" then it would be a common mortgage, and might be foreclosed. I do not mean to say that the construction put upon it by Lord Lyndhurst was not equally consistent; but, by adopting the construction I have pointed out, it would be put on the level of a common mortgage, which, in every case I should consider such a transaction to be, unless there be some intention apparent on the face of the instrument which requires the Court to put a different construction upon it. In construing this instrument, it would be quite inconsistent to say that the mortgagor should be obliged to pay the money upon demand, and yet that it should be a Welsh mortgage; that is not the characteristic of a Welsh mortgage. In a Welsh mortgage the mortgagor can never be called on to pay the money. Here, too, the money is secured by a bond and warrant of Attorney upon which judgment has been entered, so that the mortgagee might at any time seize the person of the mortgagor, or take his other property in execution for the payment of this money; but according to the construction contended for, he could not resort to this property upon which the debt was secured. Why is he not to have all the same remedies against this property that he had against all the other property of the mortgagor, when it seems to have been the intention of the parties that this property particularly should be charged with this debt? It seems to me quite inconsistent that he should be able to take every remedy against the other property of the debtor, but that he should have none against this which was conveyed to him for the purpose of securing the debt. I think there is no foundation for the objection, and I shall make a decree for the plaintiff in the common form. 1842. Chancery. BALFE v. LORD. 1842. Rolls. SHEPPARD v. DOOLAN and others. June 2, 3. scribed as a (In the Rolls.) An estate, de- UNDER the decree in this cause, the estate of the testator Thomas freehold estate Doolan in the lands of Skehanna in the county of Tipperary was sold. for three lives It was described in the rental as a freehold estate "held for three lives with covenant with covenant for perpetual renewal." for perpetual renewal, was sold under decree. In the original lease, bearing date Upon the abstract of title, it appeared that by indenture of 21st of July 1777 (the foundation of the title), Ralph Smith released to Thomas Shortt the lands in question, recited to be in his actual possession, &c.— the 21st July. To have and to hold the said premises, with the rights, &c., thereunto 1777 (the foun dation of the title) there was ex not any belonging, unto the said Thomas Shortt, his heirs, executors, adminis"trators, and assigns, from the 25th of March then last past, for and "during the natural lives and life of Joseph Burton and Elizabeth Burton, "or the longest liver of them, or whatever life or lives should for ever "thereafter be nominated or appointed, added or inserted, on the back "of said indenture, or a label affixed thereto : paying for every life a "For and du- "pepper-corn fine if demanded: yielding and paying unto the said Ralph "Smith, his heirs, executors, administrators and assigns, the yearly rent "of £33. 1s. 10d., to be paid half-yearly," &c. There was not in this deed ring the natu ral lives of J. and E., or the longest liver of them, or whatever life or lives should for ever thereafter any expresss covenant for perpetual renewal, but it contained the other usual covenants between landlord and tenant. The estate and interest of Ralph Smith, the lessor, having become be nominated vested in his son of the same name, and the estate and interest of or appointed, added or in serted, on the back of said indenture, or a label affixed thereto (paying pepper-corn Thomas Shortt, the lessee, having become vested in Thomas Doolan, the testator, By indenture of renewal, bearing date the 20th of October 1836, by and between Ralph Smith of the one part, and the said Thomas Doolan for every life a of the other part,-after reciting that by indenture of release, bearing fine if demand- date the 21st of July 1777, and made between said Ralph Smith (father ed); yielding of the present lessor) of the one part, and said Thomas Shortt of the and paying unother part; the said Ralph Smith (the father) did, for the considerations therein mentioned, demise and release to the said Thomas Shortt (in his the yearly rent actual possession) all that and those, the lands in question :—“ To hold to R.S.(the les sor), his heirs and assigns, of," &c. In 1836, the son and devisee of the original lessor executed to the assignee of the original lessee a renewal for three new lives, in which the original lease of 21st of July 1777, was recited as containing a covenant for perpetual renewal, and the renewal was expressly made "in pursuance and performance of said covenant." It did not contain any covenant for renewal, but the habendum was similar to that in the original lease, with the exception that the word and was used instead of or. On reference of title, the Master reported against it, for that the original lease did not convey a freehold estate for three lives, with covenant for perpetual renewal. On exception to this report; Held, that the report should be confirmed, and the exception to it overruled with costs. "to him, the said Thomas Shortt, his heirs and assigns, for the lives and "life of Joseph Burton and Elizabeth Burton therein named, and all and "every such further and other life and lives as should for ever thereafter "be added thereto, pursuant to the covenant for perpetual renewal "therein contained, subject to the yearly rent of £33. 1s. 10d., equivalent "to £30. 11s. of the present currency, and to a pepper-corn fine on the "fall of each life ;" and further reciting that all the estate and interest of the lessor and lessee in said original lease had become vested in the present parties respectively and that the said Joseph and Elizabeth Burton were dead; and "that said Thomas Doolan had called upon said 66 'Ralph Smith to execute to him a renewal of said lease for three further "lives, pursuant to said covenant for perpetual renewal in said lease con"tained, and had nominated the lives of his son Thomas Doolan and "Francis Sheppard and William Sheppard," &c. The said indenture witnessed-"That the said Ralph Smith, in pursuance and performance "of the said covenant for perpetual renewal, and for the considerations, "&c., did demise, &c., release and confirm unto the said Thomas Doolan (in his actual possession), and to his heirs and assigns, all that and those, "the said lands of Skehanna, &c. To hold all and singular, the said lands "and premises, with their and every of their rights, members and appur"tenances, as fully as the same were demised in and by the said in part "recited indenture of 21st of July 1777, unto the said Thomas Doolan, "his heirs and assigns, for and during the lives and life of his son Thomas, "and of Francis Sheppard and William Sheppard and the survivors and "survivor of them; and for and during the lives and life of all such "other person and persons as should for ever thereafter be added to the "time and term of said original and last mentioned demise, pursuant to "the covenant for perpetual renewal therein contained, subject to the "aforesaid yearly rent of £33. 1s. 10, payable half-yearly, and to the "covenants," &c. 66 The purchasers objected to the title, on the ground that the original lease of 21st July 1777, did not convey a freehold estate for three lives, with covenant for perpetual renewal, and the Master allowed the objection and reported against the title. The plaintiff excepted to the report, for that the Master so found, and the case now came before the Master of the Rolls on the exceptions. Mr. Monahan, Q. C., and Mr. W. Smith, for the plaintiff.-The habendum in the lease of 21st July, 1777, is to the lessee, his heirs and assigns, "for and during the natural lives and life of Joseph Burton, and "Elizabeth Burton, or the longest liver of them, or whatever life or "lives should for ever thereafter be nominated, &c., on the back of said. "indenture." Upon the fair construction of those words there cannot be a doubt that they were intended to express the agreement of the 1842. Rolls. SEEPPARD v. DOOLAN. |