the covenants in the original lease, so long as he shall be the legal owner of the lease, although he shall not take actual possession of the premises.

The reader will remark, that in the aforegoing cases of Sparkes v. Smith, and Pilkington v. Shaller (n), a Court of equity would not, on the one hand, assist the lessor on bill filed by him against the mortgagee for a discovery of the deed of assignment to him, and for a specific performance of the covenants, but left the lessor to his remedy at law; so neither would it, on the other hand, after the lessor had obtained judgment against the mortgagee at law for the arrears of rent, give the mortgagee relief, although he had never been in possession; but in the case of Lucas v. Comerford (0), the Court so far assisted the lessor as to decree the depositary of a lease to execute an assignment, to enable the lessor to bring his action against him at law. But this decision is now overruled (p).

It is decided, that if the mortgagee of a leasehold estate obtain a renewal of the lease, although there subsisted only a tenant right, the renewed lease will be held subject to the like equity as subsisted in the old lease, and will be redeemable accordingly (9); the mortgagee, however, is not bound to renew, and in case he does, will be entitled to his costs in effecting the renewal, with interest (r); and, vice versâ, a renewed lease is subject to the same equitable mortgage that affected the old lease (s).

The above rule, however, as against the mortgagee, only applies when the mortgagee obtains a renewal behind the back, or by some contrivance in fraud, of those who were interested in the old lease, and where there is either a remnant of the old lease or a tenant right of renewal on which the old lease could be engrafted (t). And therefore, in a case where, after a mortgage of a lease, the landlord recovered in ejectment for non-payment of rent, and the nine months allowed by the Irish statute to redeem had elapsed, without redemption either by mortgagor or mortgagee, and the mortgagee gave notice to the other that he should not redeem, and acted without fraud; a new lease, granted by lessor to the mortgagee at the expiration of the nine months, was held to belong to him absolutely, although the agreement had been entered into during the nine months (u); and the same would seem to apply to a case under the English statute, 4 Geo. 2, c. 28, which gives six months to redeem.

When a renewable lease is made the subject of mortgage, a covenant should be introduced on the part of the mortgagor, for concurring at his own expense in all lawful acts for obtaining a renewal, for otherwise the mortgagee cannot compel him to do so (v). And there should

be added an agreement (w) that, if he refuses, it shall be lawful for the mortgagee to renew and to charge the estate with the costs and interest. A mortgage of a leasehold messuage will comprise the good-will of the business carried on there, so that if the house and good-will are put up to sale, the mortgagee will be entitled to have the whole produce of the sale applied towards satisfaction of his debt (x).

But the mortgagee is not entitled to the produce of the sale of a new spirit license, obtained by the mortgagor after the former license, which was included in the mortgage, has been forfeited, especially if the mortgagee has previously sold the premises under the power of sale in the deed (y).

If a lessee mortgages his lease with a covenant for payment of the debt, and then both parties join in surrendering the lease for the purpose of having a new lease granted, which, it is agreed, shall be assigned to the mortgagee, and that the arrangement shall not prejudice any other security of the mortgagee, the covenant in the original mortgage deed is not extinguished by the surrender of the lease (z); and quære, if it would not be the same without such agreement?

A mortgage by way of assignment and underlease to the debtor will not be valid, if the rents to be received during the term exceed the amount of principal and interest, after deducting ground rent (a).

If an equitable mortgagee of a leasehold apply for a sale in a case of bankruptcy, the Court will not order the parties to indemnify the assignees against breach of covenants, but will give the assignees time to consider whether they will accept or reject the lease (b). And if the assignees do not come to a decision within a reasonable time, the Court will make the usual order, giving the assignees the option to conduct the sale if they choose (c).

It has been already remarked, that a release by the mortgagee of the right of renewal, will not be binding on the mortgagor or his representative claiming a right to redeem (d).

(w) For a precedent of such Covenant, see Appendix, No. 4.

(2) Chissum v. Dewes, 5 Russ. 29. Infra, Bk. 2, Ch. 9.

(y) Manifold v. Morris, 5 Bingh. N. C. 420; et vide Ex parte Reid, 1 Dea. & Chit. 250.

(z) Greenwood v. Taylor, 14 Sim.

505.

(a) Vide infra, Bk. 5, Ch. 2; Bk. 2, Ch. 9.

(b) Ex parte Fletcher, 1 Dea. & Chit.

318.

(c) Ibid. 356.

(d) Supra, p. 22.

CHAPTER VI.

OF MORTGAGES WITH POWER OF SALE.

It is now usual in practice to give the mortgagee a power of sale over the estate in case default is made in payment of the mortgage-money beyond a time limited. The modes of accomplishing this are various. In some instances, the estate is limited to the use of the mortgagee for a term of years, with the usual proviso for redemption, and subject thereto, to the use of trustees in fee upon trust to sell. In other instances it is limited at once to trustees in fee, in trust to sell if the money is not paid at a given day; and the proviso for redemption is also inserted. In other instances, it is limited to the mortgagee in fee, upon trust to sell if the money is not paid as in the preceding instance; and, in other instances, it is limited to the mortgagee in fee, with the usual proviso for redemption, attended with a declaration, that if default is made in payment at the given time, it shall be lawful for the mortgagee, his heirs or assigns, after notice in writing requiring payment, to sell, &c. To which it may be proper to add a proviso that such power of sale shall not prejudice the right of foreclosure; and that the assigns of the mortgagee, their heirs or assigns shall have the like powers as if they had been parties to the deed.

Either mode is valid and effectual, but the latter is most to be recommended; for, on breach of the proviso, it bestows on the mortgagee an absolute estate; and at the end of a further time gives him a power of sale; and leaves open to him the option, in the mean time, of filing his bill to foreclose.

Doubts were formerly entertained of the validity of an exercise of these powers of sale, without the concurrence of the mortgagor, or the sanction of a Court of equity (a), but they were groundless; a slight consideration will shew they are not within any of the mischiefs intended to be guarded against by the Courts of equity, for they give nothing to the creditor beyond his principal, interest, and costs; they bestow on him no collateral or ulterior advantage; and they only enable him with promptitude to obtain payment of his mortgage debt.

The case of Croft v. Powell (b) was considered as raising considerable grounds for doubt (c); but so far from it, it will, on consideration, be seen to be rather an authority in favour of these powers. That case was as follows. In 1703, Rouse conveyed lands to Baldwin in fee, with a defeasance by way of mortgage, and it was agreed, that if the (a) 1 Powell on Mortgages, 14, 4th edit.

(b) Croft v. Powell, Comyn's Rep.

603.

(c) 1 Powell on Mortgages, 14, 4th

edit.

money was not paid by the appointed time, it should be lawful for Baldwin and his heirs to mortgage or sell the lands free from redemption; and out of the money raised by such mortgage or sale, retain the mortgage-money and interest, and be accountable for the overplus to Rouse and his heirs. Default was made in payment, and the lands were afterwards charged by Rouse with further sums of money to other persons. In the year 1716, Baldwin agreed to sell the lands to Gab. Powell for 43007., and to warrant the same to him and his heirs, except as thereinafter excepted, in which exception was contained the mortgage defeasance; and accordingly, by lease and release of the 25th and 26th of March, 1716, Baldwin conveyed the lands to Powell in fee, and in the conveyance the defeasance was mentioned and excepted, and Baldwin covenanted that 4400l. was due to him on the mortgage. It further appeared that Rouse and wife had levied a fine of the premises to Baldwin, and that Baldwin had for some time before the sale been in possession, and had presented to a benefice belonging to the estate which had become vacant, and that Rouse was privy to the agreement for sale to Powell. It also appeared, that in 1719 Powell had filed his bill in the Exchequer against Rouse and wife, praying to be quieted in possession, or that, if the estate was redeemable, Rouse might be decreed to redeem, or be foreclosed, on which Rouse filed his cross-bill to redeem, and Powell, in his answer to the cross-bill, insisted that the fine was levied by way of confirmation to Baldwin, who thereupon took upon himself to be absolute owner, and that the defeasance was noticed at Baldwin's request; but Powell admitted, that fearing he might be accountable to Rouse for the overplus beyond what was due to Baldwin, he made Baldwin covenant that 44007. was due, and he afterwards, on taking advice, retained 13007. as an indemnity, and he offered to pay the 13007; and submitted that Rouse or Baldwin should redeem. It does not seem that any further proceedings took place until 1729, when a bill for redemption was filed by a second mortgagee, and the daughter and heir of Rouse, and Powell insisted he had an absolute estate, not redeemable, under the power of sale, and cited Bonham v. Newcomb (d), (which was clearly not in point, and the decision on which is, in the argument in Croft v. Powell, placed on the wrong ground); and insisted on the effect of the fine, and on Rouse's consent to the sale, and on more than twenty years' possession since the mortgage to Baldwin; and that the exception of the defeasance, and the covenant by Baldwin that 44007. was due, was a prudent caution, since Baldwin might possibly be accountable for the overplus, if he had sold for more than was due to him. It was on the other hand argued, and so decided, that the estate was redeemable at any time while in the hands of Baldwin; that though Baldwin had a power, on nonpayment of the money within the year, to mortgage or sell in order to raise the money lent, and to be accountable for the overplus, it was not then to be considered what he might have done, but what he had done, and it was manifest it was not Baldwin's intention to give Powell an absolute and indefeasible estate, for it was not conveyed to him absolutely, and free from the equity of redemption. Besides, the bill filed by Powell

(d) Supra.

in 1719, shewed he was conscious he had a redeemable estate, as also his retaining the 13007 as an indemnity; that Baldwin presenting to the benefice would not help the case, for he had the legal estate, and had at law a right to present, and it did not appear but he might have presented on the nomination of Rouse; and that as to the fine, it only confirmed the estate in statu quo. And lastly, that the length of time was in that case of little weight, for that although Lord Nottingham did look upon the Statute of Limitations as a proper rule to determine the time of redemption, yet that had in many cases been varied from, and no certain rule in point of time had been fixed upon; and in the principal case, the conveyance to Powell was in 1716, and he preferred his bill in 1719, and the bill by the present plaintiff was in 1729, so that twenty years had not elapsed, and redemption was decreed.

Now it is manifest, that so far was the aforegoing case from raising considerable doubt of the validity of the powers for sale in question, that, on the contrary, in express terms it admits their validity, and the real question in Croft v. Powell was, whether it was a sale or a transfer; and it was manifestly the latter. The arguments drawn from the fine levied to Baldwin, and his presentation to the benefice, were untenable; and the exception of the defeasance, Baldwin's covenant for the amount of the mortgagee's debt, the reservation of the 13007., and the bill filed by Powell, were unanswerable objections to the plea of its being an absolute purchase.

Consequently, had these powers for sale stood on no better authority than the case of Croft v. Powell, it may be thought there was little hazard in a reliance on them. They have since received express judicial decisions in their favour; the first is the case of Clay v. Sharpe (e). Wardell assigned leasehold premises to Day in trust for Sharpe, subject to redemption on retransfer of 2000l. stock, and it was agreed that if default was made in the retransfer, it should be lawful for Day to sell, and out of the purchase-monies reimburse himself his costs, and repurchase the 2000l. stock, and that he should pay the overplus to Wardell, and Wardell covenanted to concur in the sale. But it was provided that his concurrence should not be necessary to perfect the title, being intended only as a further satisfaction to the purchaser. Default being made in payment of the mortgage-monies, Day, by Sharpe's directions, put up the mortgage premises for sale, and Clay became the purchaser. Clay's attorney prepared the assignment, and made Day, Sharpe, and Wardell parties. Wardell refused to execute, on which Clay filed his bill for specific performance against the three parties. Wardell, in his answer, alleged that he resisted the sale, as having been made without his consent, and at an under value. He afterwards became bankrupt, and a supplementary bill was filed by Clay against his assignees. On hearing the cause, the Chancellor dismissed the plaintiff's bills as against Wardell and his assignees with costs, and decreed that the agreement entered into by the plaintiff with Day and Sharpe for the purchase of the premises should be carried into execution, and on the plaintiff's paying to Sharpe and Day the residue of the purchase-money, they should execute an assignment to

(e) Clay v. Sharpe, 18 Ves. 346, note; Sugd. Vend. & P., Append. 16, 10th edit.