No. II.

Equitable Mortgage by the Deposit of Title Deeds,

with Agreement to execute a

administrators or assigns, or his or their counsel in the law, shall require.

4. AND FURTHER the said (mortgagor) doth hereby for himself, his heirs, executors and administrators, covenant, promise and Legal Mortgage agree with and to the said (mortgagee), his executors, adminisCovenant from trators and assigns, that he the said (mortgagor), his heirs,

mortgagor to

pay principal and interest on demand.

That until a

legal mortgage

is executed.

mortgagor will

stand seised in trust for mortgagee.

Schedule.

executors or administrators, will upon the request of the said (mortgagee), his executors, administrators or assigns, well and truly pay or cause to be paid unto him or them the said sum of 2,5601., together with interest for the same at the rate of 51. for every 100%. by the year, without deduction on any account or pretence whatsoever.

5. AND MOREOVER that until such mortgage assurance as aforesaid shall be perfected by the said (mortgagor), his heirs or assigns, he and they shall and will stand scised and be possessed of and interested in all and singular the hereditaments and premises comprised in the said title deeds and writings, UPON TRUST for the said (mortgagee), his executors, administrators and assigns. IN WITNESS whereof the said parties to these presents their hands and seals (d) have set the day and year first above written.

THE SCHEDULE TO WHICH THE ABOVE-WRITTEN ARTICLES REFER. [INSERT HERE the title deeds and evidences of title, according to their respective dates.]

Practical

observations.

Equity will

not deeree a

specific performance

when more than the legal rate

of interest is reserved.

(d) As an ad valorem stamp is necessary to an equitable mortgage of this kind, it seems advisable to have it under seal, by which means it will operate also as a deed of covenant, and thus enable the mortgagee to maintain an action at law for the recovery of principal and interest, in the same manner as if an actual conveyance by way of mortgage had been executed.

A court of equity will not decree a specific performance of a legal mortgage of landed property of any kind, upon a verbal agreement, or even a written memorandum upon a deposit of title deeds, where a greater amount of interest is reserved than the law permits upon mortgages of property of a like nature. Hence, where a party had lent money on a promissory note at 61. per cent. interest, and deposited deeds as a collateral security, with a verbal agreement to execute a legal mortgage, the court refused to give its aid to create such mortgage: (James v. Rice, 22 L. T. Rep. p. 218.)

No. III.

EQUITABLE MORTGAGE BY DEPOSIT OF TITLE DEEDS, WITH
A PROVISO THAT UPON MORTGAGOR'S COMPLETING CERTAIN
BUILDINGS THEN IN COURSE OF ERECTION ON A PORTION
OF THE PREMISES, MORTGAGEE WILL DELIVER UP THE
TITLE DEEDS RELATING TO THE OTHER PART OF THE
PROPERTY.

of the one part, and (mortgagee), of, &c., of the other part.

2. WITNESS, that the said (mortgagor) hath this day deposited Testatum. with the said (mortgagee) the title deeds and writings specified and set forth in the first and second schedules hereunto annexed, those in the said first schedule relating to all that freehold estate [DESCRIBE parcels shortly], situate, &c., and the title deeds specified and set forth in the said second schedule, relating to all that other freehold estate [DESCRIBE parcels shortly], situate, &c., all which said title deeds and writings are so deposited with the said (mortgagee) for securing to him, on demand, the sum of 500l., this day advanced by the said (mortgagee) to the said (mortgagor),

No. III.

Equitable Mortgage by deposit of Title Deeds.

mortgagor to

execute a valid

request.

together with interest for the same, at the rate of 51. for every 1007. by the year.

3. IN CONSIDERATION whereof the said (mortgagor) doth hereby Covenant from covenant, agree and undertake, whenever thereunto requested by the said (mortgagee), and at the costs of him the said (mortgagor), mortgage upon his heirs or assigns, to execute a good, valid and effectual mortgage in fee simple in possession of the said estates comprised in the said title deeds or writings, for securing the repayment of the said sum of 3004., and interest as aforesaid; such mortgage deed to contain immediate powers of sale, in case of default in payment of principal and interest, within six calendar months from the day of the date of the mortgage deed, with usual powers of giving receipts and indemnity to purchasers, and other clauses incidental to ordinary mortgage assurances, as the said (mortgagee), his executors, administrators or assigns, or his or their counsel in the law, shall require.

To pay principal and interest on demand.

4. AND FURTHER, the said (mortgagor) doth hereby for himself, his heirs, executors and administrators, covenant, promise, and agree with and to the said (mortgagee), his executors, administrators and assigns, that he the said (mortgagor), his heirs, executors or administrators, will, upon demand of the said (mortgagee), his executors, administrators or assigns, well and truly pay or cause to be paid unto him or them the said sum of 500l., together with interest for same, at the rate of 51. for every 1007. by the year.

That until a 5. AND MOREOVER, that until such mortgage assurance shall valid mortgage is executed, be perfected, he the said (mortgagor), his heirs and assigns, shall mortgagor will stand seised and will stand seised and be possessed of all and singular the upon trust for hereditaments and premises comprised in the said title deeds and writings, or any of them, UPON TRUST and for the sole use and benefit of the said (mortgagee), his executors, administrators and assigns.

mortgagee.

Proviso, that if buildings in course of

erection on part of the

6. PROVIDED ALWAYS, AND IT IS HEREBY FURTHER COVENANTED AND AGREED, by and between the said parties hereto, that if the dwelling-houses now erecting by the said (mortgagor) on

No. III.
Equitable

Mortgage by
Title Deeds.

deposit of

the premises comprised in the title deeds and writings specified and set forth in the first schedule hereunto annexed, shall be built and completed within the space of twelve calendar months from the day of the date hereof, according to the plan indorsed on these presents, then and in such case the said (mortgagee), his executors, premises are administrators or assigns, will, at the request and costs of the said within a (mortgagor), his heirs or assigns, deliver up to him or them all and specified time, every the title deeds and writings specified and set forth in the said deliver up the second schedule hereunto annexed, whole, undefaced, uncancelled to the other and unobliterated.

completed

mortgagee will

deeds relating

portion of the property.

of title deeds.

7. AND FURTHER, that the said (mortgagee), his heirs, executors, Covenant by administrators or assigns, shall and will from time to time, and at the production mortgagee for all times during the continuance of this security, at the request and costs of the said (mortgagor), his heirs or assigns, produce and show forth to him or them, or to any person or persons with whom he or they shall or may have entered into any agreement or treaty for the sale or mortgage of the hereditaments and premises comprised in the said two several schedules hereunto annexed, all and singular the title deeds and writings in the said two schedules respectively specified and set forth; and at such like request and costs furnish true and attested or other copies, extracts or ab stracts, and permit the same to be examined and compared with the originals.

IN WITNESS, &c.

No. IV.

MEMORANDUM MADE BY A WITNESS ON A DEPOSIT OF TITLE-
DEEDS WITH BANKERS TO SECURE A SUM THEN ADVANCED,
AND ALSO FUTURE ADVANCES.

[No stamp will be necessary.] (a)

MEMORANDUM.—(Mortgagor), of, &c., hath this day deposited with Messrs. (bankers), of, &c., bankers and copartners,

Practical observations.

(a) Although, as we have previously remarked (ante p. 862) an agreement accompanying a deposit of title-deeds will so far partake of the nature of an actual mortgage as to require an ad valorem stamp, it has been held that the Stamp Acts do not extend to a mere acknowledgment in writing; (Pyle v. Partridge 15 Mees. & Wels. 20; Fancourt v. Thorpe, 15 L. J. (N S.) 344, Q. B.; see also Tilsley's Stamp Acts, 476, 492.) And notwithstanding the express words of the Stamp Acts, it is the daily practice of bankers and mercantile men to make advances to a large amount on unstamped memorandums, stating the deposit as that day made, and an agreement in express terms from the depositor to execute a valid mortgage at some future time, or when called upon. The safest course, however, seems to be for the depositor to enter into a parol agreement only at the time of deposit, of which a witness then present may make a memorandum, and refer to it at any future period for the purpose of refreshing his memory. This memorandum may also be read and referred to in the same manner by any other persons present at the time it was made and who were witnesses of the transaction. It will always be advisable at the time of the deposit to read over and explain the terms of the memorandum to the depositor. After this a memorandum may at any time afterwards be drawn up stating the previous deposit and its object, with an undertaking on the part of the depositor to execute a valid mortgage to such person as the depositary should direct. Such a writing would fall directly within the authorities above referred to, and it seems would be admissible in evidence, although unstamped, and, if so admissible, the depositary would be entitled to his costs in case of the depositor's bankruptcy; for even a letter acknowledging the purpose of the deposit, and written some months afterwards, was holden sufficient for this purpose : (Ex parte Reynolds, 2 Mont. & Ayr. 104; S. C., 4 Dea. & Ch. 278; 9 Hughes Pract. Mort. 175.)