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Whether a gift of a mortgage can be made by parol.

veritable estate, insomuch, that the mortgagee is there considered as a purchaser by the preclosure, and, by consequence, a will made before the preclosure does not pass such subsequent acquisition. In analogy, therefore, to these maxims, and adhering to them still in their construction and application of the statute, these courts have, with obvious propriety, regarded this consequential translation of the interest in the land as out of the prohibition of the statute; for it is not land, qua land, which passes, but a pledge, or security, in all respects subservient to a personalty, incapable of existing in separation from it, existing only for the sake of it, and for no other purpose, and so radically removed by the discharge of the debt, as to be considered as never having existed at all.

By thus directing our attention to the true nature and attributes of a mortgage in the contemplation of those courts, whose appropriate remedies have made it principally the subject of their jurisdiction, we arrive, perhaps, at a more satisfactory reason for this instance of a translation of an interest in land, without writing, than by arranging it with the examples of the implied trusts expressly excepted by the statute; for the assignment or transfer of the debt is a transaction certainly not within the letter, and perhaps not within the intention of the clause, which provides, "that where any conveyance shall be made of any lands or tenements, by which a trust or confidence shall or may arise or result by the implication or construction of law, or be transferred or extinguished by an act or operation of law, then, and in every such case, such trust or confidence shall be of the like force and effect, as the same would have been if this statute had not been made."

But though such appears to be the effect where an assignment of the debt is made for valuable consideration, being a contract to which equity will, without doubt, give effect, yet it is open to much question, whether a mortgage can pass by mere gift by parol; for it is said, that the mere gratuitous donation of a chattel (for such is the debt at law, and the whole benefit of the mortgage, with all its securities in equity) can only be made effectual by actual delivery; and then the question occurs, whether the debt or pledge are things susceptible of actual delivery. If a moveable thing is delivered by me to another, and I accompany this act with a declaration of my intention to part absolutely with

the thing delivered in favour of the donee, it seems clear that nothing more is necessary to change the property; though, for want of writing, the effect of such a transaction is open to be modified and governed by parol evidence. Whether the delivery is an act inseparable from the nature of a gift, it is scarcely of any practical importance to inquire, since, though in an abstract view, a man may, perhaps, transfer the property in a moveable thing by a simple parol declaration of his will so to do, yet, without doubt, such declaration creates no contract, and confers no legal right or remedy, but is liable to be revoked by the same breath which gave it existence; and, as against third persons, [278] the pretended donee would find it difficult, if not impossible, to establish his property, without proof of actual or virtual delivery, or the actual or constructive possession of the thing itself, which is expressed by the maxim, donatio perficitur possessione accipientis.'

A case is reported by Mr. Ambler,(u) in which the effect of a parol gift of a mortgage came imperfectly under discussion— imperfectly, because other questions were mixed with it, which prevented it from being distinctly considered. Lady Tynte being entitled to a sum of 1000/. secured by mortgage upon a real estate, and being old and afflicted with a disorder, of which she died about six weeks afterwards, delivered the deeds and writings, relating to the mortgage and estate, to Hassel, in the presence of several witnesses, one of whom proved, that she made use of the following expression at the time, "I deliver this as my act and deed;" proof was also read of a declaration by Lady Tynte, that after the delivery of the deeds, Lady Tynte said, she hoped that Hassel would be a good girl, for that she had given her a mortgage of 1000l. for her own immediate use and benefit. On Lady Tynte's death, a bill was filed by Hassel, among others, to have the benefit of this gift. Several questions were made; first, whether this was a donatio causa mortis ; secondly,

whether it was a donatio inter vivos; thirdly, whether, it being a gift of a mortgage upon a real estate, it could take effect, or was not void by the statute of frauds. The Lord Chancellor said, that the question on the statute of frauds and perjuries was of great delicacy and nicety. That very slight evidence of the gift had

(u) Ambl. 318.

been given by one of the witnesses; the other proved the words made use of at the time; but it was difficult to know what construction to put upon them. The proof of the declarations seemed to clear up her intention. That as to the question, whether it was donatio mortis causa, it looked more like a donatio inter vivos. That there was such a sort of donatio mortis causa mentioned in the *civil law; but whether it were the one or the other, the question was, whether it was allowable by the statute of frauds. That perhaps it would be more favourable to consider it as a donatio causa mortis. That no case had been cited but that of Richards v. Sims, which had come on in a very different shape from the present. That what had been argued at the bar, was very true, that the money was the principal, and the land only the security, and that the money would pass by a will not attested according to the statute of frauds. Yet that here was an interest in the land, and it was very considerable, whether it could pass by parol? His Lordship concluded with saying, that he was very unwilling to give his opinion upon it, and that it was not then necessary; and that, therefore, at all events, he should reserve the consideration of this question.

It has been attempted a little above, to be shown that it is not inconsistent with the provisions of the statute of frauds, to suppose the interest in the land, arising upon a mortgage, to be transferred in equity, where the debt has been verbally assigned for a valuable consideration; and, according to the principles of the reasoning on which that opinion was endeavoured to be sustained, the difficulty which the circumstances of the case of Hassel v. Tynte present, is not, whether such interest can be consequentially transferred in equity without writing; but whether such interest can be transferred upon a gratuitous parol donation of the interest in the debt; for it seemed to the writer of these pages, that, according to the authoritative dicta of judges, and the analogies of their decisions, the interest in the land would, in equity, invariably follow the interest on the debt, for which the land was the mere pledge or security. But as a mere gift must be effectuated or proved by delivery, the question seems simply to be this-Is a mortgage a thing capable of being delivered? In discussing which question it should be remembered, that a mortgage is composed of two things-the debt and the security. Now the debt is a chose in action, and, as such, incapable of delivery,

being an incorporeal existence; and the statute seems very plain. ly and emphatically to preclude any primary or direct transfer of the interest in the land, which, *as has been above endeavoured *[ 280] to be shown, can only pass in equity as consequential to the assignment of the debt; which assignment takes place in the nature of a contract in equity, where it is supported by a valuable consideration. But the delivery of the mortgage deeds, by way of gift, can only transfer the debt as an accessory, regarding the mortgage as the principal; but the truth being, that the debt is the principal, and the mortgage of the land the accessory, we cannot suppose the debt to follow the delivery or gift of the mortgage deeds, without reversing the maxim of law and of logic accessorium sequitur principale.(111) With these observations, the writer dismisses a question not likely often to occur, and not hitherto settled upon the basis of any decided case.

deeds, by way of secu rity, for a ed,

There is, however, another instance of the practicability of Of the inte transferring an interest in land by the help of equitable jurisdic- rest transferred in equition, without writing, notwithstanding the statute of frauds. The ty by the deinstance here meant, is the deposit of deeds by way of creating posit of an equitable lien for the security of money borrowed. This subject has before been considered in a note in the preceding chapter, to which the reader is referred; since writing which, how ever, there has fallen in my way, the case ex parte Coming,(x) which is in confirmation of the cases cited in that note, with the addition of some useful remarks, which render it very fit to be introduced in this place.

The case came on upon a petition for the petitioner to be admitted as a creditor under a commission of bankruptcy, upon the following transaction, which appeared upon the certificate of the commissioners, and was proved by affidavit. Previously to the bankruptcy, the petitioner agreed to lend the bankrupt 1500%. for which purpose he sold out stock of *that value, upon condition

(x) 9 Vez. jun. 115.

sum borrow

*[281]

(111) But perhaps the delivery of the bond, if one accompanied the mortgage, might be a good delivery to perfect the gift; for a bond is to many purposes considered as goods; and see the reasons given by Lord Hardwicke, in Snelgrove v. Bailey, 3 Atk. 214, for considering the delivery of a bond as a good donatio causa mortis.

*[282]

that the bankrupt should make a security by way of mortgage to replace the stock within twelve months, and to pay the dividends in the mean time; in pursuance of which agreement, the bankrupt deposited title deeds with his wife, who swore that the deeds always from that time remained in a trunk, of which she kept the key, until they were taken away by the messenger; and the question was, whether there was any proveable debt or actual lien previously to the bankruptcy; upon which the counsel, in support of the petition, contended, first, that this was an equitable mortgage, by the delivery of the deeds by the bankrupt to his wife, as a deposit to secure the money lent by the petitioner; secondly, that as a loan of stock, to be replaced by a certain day subsequent to the bankruptcy, it might be proved, in analogy to the case of a surety. On the other hand, it was insisted, for the assignees, that the circumstances of this case did not amount to an equitable mortgage; and, upon the other point, that this was a mere parol engagement to replace stock at a given day, the value of which must be uncertain. The Lord Chancellor thought, that the real intention of the agreement was to give a bond and a mortgage. First, said his Lordship, if you cannot make any thing of the mortgage, to charge the real estate, it may be contended, upon the effect of the parol agreement, that, though it may be said the land is not charged, the petitioner may insist, that his money is not secured within the terms of the agreement; and the question will then be, whether the terms of the agreement can, under these circumstances, protect the debtor from the immediate repayment of the debt. The petitioner may say, that the other put an end to the positive contract, and that the only existing contract is that implied by law upon the loan of the money, which might be recovered in an action. It is also deserving of consideration, whether any previous demand and refusal was necessary; for, if the condition, upon which the money was advanced, is not made good at the time, the lender might say, at law, the condition was refused, as much as if there had been a positive demand, and that, therefore, it was to be considered as money lent in the ordinary way.

But, said his Lordship, beyond that, there is another question deserving much consideration, i. e. whether this is to be considered as a deposit? He remembered that, previous to Russell v.