Page images


such sale, the purchaser should be relieved from the necessity of making any inquiries as to the fact of the notice having been given and exempted from responsibility, in consequence of any negligence in giv. ing such notice.

Where the money belongs to two or more persons jointly, as in the case of trustees, it should be stipu. lated that the survivor will be entitled to the entire amount, and that his receipts will alone be necessary.*

As a mortgagee, when he sells the mortgaged property under the power of sale, will be bound to make out his own title, as in the case of vendors selling their own property, he would, in cases where a sale may be reasonably anticipated, be justified in insisting upon the title being investigated and verified with nearly as much care and particularity as in the case of a purchase.

The form of a mortgage-deed, so far as it operates as a conveyance, does not vary from a conveyance on a purchase. The great difference between the deeds is the covenant for payment of the amount intended to be secured, and the proviso for redemption on such payment. The same covenants for title are alike applicable to both modes of conveyance, those in the mortgage not being qualified as those in an absolute conveyance. In the former," the conveying party covenants that he is absolutely seised of or entitled to the property, and that he has good right to convey it, but in the latter those covenants are qua. lified, the party covenanting only, that notwithstanding any act of his own, or of some ancestor, or other particular person named, he is seised, and has good right to convey; or, in other words, that neither he or such other person have by any act disqualified him from conveying the interests professed to be conveyed; and in the concluding covenant in a mortgagedeed the costs of any further assurance of the premises

* The propriety of this course will appear by reference to the case of Vickers v. Cowell, i "Beav. 529.

u Cripps v. Reade, 6 T. R. 606.


is thrown upon the inortgagor, and not, as in purchase-deeds, on the person requiring it. The other clauses peculiar to mortgages, as the power of sale, &c., have been already referred to.

Where several persons concur in making up a sum about to be lent on mortgage, and it is wished to avoid the expense of several mortgage-deeds, or of the increased ad valorem duty which would be payable where the money is made repayable to the different parties in the proportions in which each advanced it, and not to them all jointly, the premises may be conveyed to all the mortgagees as joint-tenants, or may be vested in a trustee named by them all, or, if so agreed upon, in one of their own number, and such person should give to each party a declaration of trust as to his interest in the and premises, and if there should be any terms of years in the property, they may be assigned to those mortgagees in whom the fee is not intended to be vested, in order to give thein some additional security by making their concurrence necessary in any future dealing with the property.

Mr Jarman, in his notes to Bythewood's Convey- Copyholds. ancing, makes the following suggestions with reference to, the mortgage of copy holds, which are well worthy of attention : " In preparing mortgages of copy holds," says that writer, “it is usual for the mortgagor to enter into a covenant with the mort. gagee to surrender them, which is followed by an actual conditional surrender of the copyhold lands to the mortgagee, and simultaneously enter into a deed of covenant for the payment of the money, and for the title, further assurance, &c., and the latter seems to be the more eligible plan, as it leaves nothing to be done to render the mortgagee's title complete, except admission, which is his own act. The accompanying deed also frequently contains a power of sale."

A mortgagee of leasehold property should not only Leaseholds. ascertain at the time of the loan that the rent has

Title-deeds ad notice.

been paid, and that the covenants in the lease, espe. cially those for the insurance and repair of the premises, have been performed, but should, from time to time, during the continuance of the loan, satisfy himself upon these points, and should (in case of the mortgagor's neglecting to do so) take the proper steps for the preservation of the premises, and preventing the lease from becoming forfeited to the lessor, and he will be entitled to a lien on the mort. gaged premises for the amount so expended with interest;' but in order to prevent the mortgagee from becoming liable to the rents and covenants of a lease as assignee thereof, it is the usual practice to effect a mortgage of leaseholds by means of an under. lease, leaving a merely nominal reversion of a day or two in the mortgagor.

A mortgagee should never allow the title-deeds to be retained by the mortgagor, but where they are in the hands of a prior mortgagee, or other incumbrancer, immediate notice of the loan should be given to such person, from whom inquiries should also be made as to the amount due to him on his security. The advantage of giving such potice must be apparent, when it is considered that a first mortgagee will be entitled to a prior lien for any further sums lent by him to the mortgagor, even after the creation of the second incumbrance, if he had no notice of it at the time of making the advance.

Should the mortgage be of an equitable interest only, and the title-deeds be in the hands of trustees, who would not be justified in giving them up to the mortgagee, a notice of the charge should be given to such trustees; and, in short, it may be laid down as a general rule, which ought rarely to be departed from, that where the mortgagee is unable to procure both a conveyance of the legal estate and the pos. session of the title deeds, notice of his incumbrance should be given to the trustee or other party in

Hardy v. Reeves, 4 Ves. 466.

whom the legal estate is vested, and also to every person interested in any prior incumbrance.

If the mortgage-money is not repaid at the time Repayment of mentioned in the proviso for redemption, the mort. mortgagegagee is entitled to six calendar months' notice of the mone mortgagor's intention of repaying it," and he cannot be compelled to receive it at any time before the expiration of that period, unless (as by having taken any steps to obtain payment) he has precluded himself from objecting to the want of notice; but though it has been sometimes thought that a mortgagor is entitled to six months' notice of the mortgagee's intention to call in the money, it is apprehended that whenever the point is submitted to judicial decision, it will be found to be without foundation."

As the mortgagee is entitled to six months' notice of intention to pay off the mortgage-money, to afford him time to obtain another security on which to in. vest bis money, in order that he may not be a loser by its being unproductive, he is sometimes induced to take it in on a less notice, or without any notice, upon being paid interest for such period in advance as there was deficiency in the notice. The propriety of accepting such interest has been much questioned, and it has been suggested, that such a transaction would be usurious. The editor does not feel this ob. jection in the force with which it is urged by some writers on the subject, but cannot, in the absence of authority, venture to say that it is unfounded ; but however this may be, there can be no doubt that, if the money should be invested at any time before the expiration of the period for which interest has been paid, it would be the duty of the mortgagee to return all interest paid to him for the time subsequent to the day of investment.

As the mortgagee, if he should insist on his strict rights, will be entitled to a fresh notice if the money be not paid on the day mentioned in the notice,

Sharpnell v. Blake, 2 Eq. Ca. Ab. 603 ; Gyles v. Hall, 2 P. W. 378; Garforth v. Bradley, 2 Vez. 678.

* Coote on Mortgages, 553.,



the mortgagor should tender it to him on the very day; and if the mortgagee were then to refuse it, he would not be entitled to any subsequent interest, unless his refusal was justified by the mortgagor hay. ing accompanied the tender with some improper requisitions, as for the execution of a reconveyance which the mortgagee had no opportunity of previously

perusing,' or which contained unusual provisions. Reconvey The propriety of obtaining a reconveyance of

the premises on the mortgage being paid off, cannot be too strongly insisted upon. The expense occasioned on a subsequent sale of the property, by neglecting to do so, is often so considerable, that, independent of the inconvenience of leaving the legal estate outstanding, it ought to prevent persons from allowing the desire of saving a small and present expense to lead them to incur the risk of a greater expense at

some future time. (See Poole v. Pass, I Beav. 600.) Entering into If the interest is not regularly paid, a mortgagee receipt of

should give notice to the tenants to pay their rent to him, after which he would be entitled to receive as well the rent then due, but not paid, as that which may become due after the notice, and any payment by the tenant to the mortgagor, after such notice, will not deprive the mortgagee of his right to reco

ver it from such tenant. Foreclosure. If the mortgagor, upon a bill of foreclosure being

filed against him, is desirous of retaining the property, and paying off the mortgage-money, he should not go to the expense of putting in an answer; but (if he is willing to admit the title of plaintiff) he may at once move for the usual decree of reference to the master to take an account of the amount due, under which he may obtain the same indulgences as to time, which he might have obtained under a decree made upon the hearing of the cause, the loss of time between such hearing and the motion being well com pensated by the saving of expense.

I cannot find any case upon the point, but I fear that by the terms of the act of Parliament, which

✓ Wilshaw v. Smith, 9 Mod. 441. 1 7 Geo. II. c. 20.

« PreviousContinue »