deeds, other than the deed of transfer, to the transferor, who was the solicitor of the mortgagor, in order that an abstract might be prepared for a sale of the estate, enabled the solicitor to sell the estate as unincumbered, and abscond with the purchase money (q).

In like manner, a second legal mortgagee will not be postponed to a prior equitable incumbrancer merely by the absence of the title deeds, where he has obtained his security without fraud or very gross negligence on his part (r). Though otherwise where he has knowledge of such facts as would lead any honest man to make inquiries, and he studiously avoids doing so (s).

We have elsewhere considered how far a subsequent incumbrancer without notice, who has contracted for a mere equitable interest, can defend himself against a bill for discovery and delivery of the title deeds in his possession (t).

In all instances of the right to tack, it must be intended that the party claiming the right had no notice of the other incumbrance at the time of lending his money, for (as observed in Brace v. The Duchess of Marlborough), this is his sole equity, and the notice must positively be denied (u), whether charged by the bill or not (v). What will amount to notice has been already considered (w). An exception to this rule appears to exist in a case of a mortgage being made to secure the sum then lent, and also further advances, and a second mortgage being afterwards made to another person with notice of the first, and further advances being subsequently made by the first mortgagee with notice of the second; in which case Lord Cowper held, the first mortgagee might tack against the second, because it was the folly of the latter to lend his money on such a security (x). Upon the same principle, a party who advances money to the vendor of an estate, contracted to be sold, upon the security of the unpaid purchase money, but which the purchaser of the estate afterwards applies in payment of suppressed incumbrances, cannot, by getting in a first mortgage, tack to that the sum so advanced by him, not only on a ground mentioned elsewhere, but also that by notice of the agreement for purchase, he has full notice of the purchaser's right to indemnify himself (y); nor are the equities of the two parties equal in such a case (z).

We have elsewhere noticed, that interest cannot be converted into principal as against a puisne incumbrance of which the first mortgagee has notice (a).

Notwithstanding the dictum of Lord Redesdale in Latouche v. Dunsany (b), and the decision of Lord Erskine in Ex parte Herbert (c),

E E

was held bound by notice arising from his admission of a mesne incumbrancer to a copyhold.

(x) Gordon v. Graham, 7 Vin. 52.
Gibson v. Ingo, 6 Hare, 124; but vide
2 Dr. & W. 431, where Sir Edward
Sugden throws a doubt upon this point.
(y) Lacey v. Ingle, 2 Phill. 413.
(z) Ibid.

(a) Pages 303, 431.
(b) 1 Sch. & Lef. 152.
(c) 13 Ves. 189.

it appears that an act of bankruptcy by the mortgagor, prior to the lending, would not, even before the 2 & 3 Vict. c. 29, prevent tacking (c); the judgment of Lord Eldon in Ex parte Knott (d) being manifestly inaccurately reported, and not bearing the construction put on it by Lord Erskine.

Whether a commission of bankruptcy was so far notice as to prevent tacking of monies advanced subsequently to it, was an unsettled point; the case of Hitchcock v. Sedgwick (e), which was considered by Lord Talbot, in Collet v. De Gols, as an authority for such doctrine, having been reversed by the House of Lords (ƒ). "But after the passing of the 6 Geo. 4, c. 16, by which the issuing of a commission or fiat was made notice after the adjudication of the bankruptcy in the London Gazette, if the person to be affected by notice might reasonably be presumed to have seen the same, a commission or fiat would, it seems, under the circumstances stated in the statute, prevent tacking (g). And the same rule may perhaps be acted upon under the new statute, though it contains no such provision (h).

Equity is not scrupulous by what means a bonâ fide incumbrancer, without notice at the time of advancing his money, obtains a legal protection for his security; for if he get in a judgment or statute which is satisfied, yet if he can make use of it at law for his protection, equity will not interfere to prevent him (i). In like manner, he might use a satisfied term for his protection (k). Nor is it material, although no consideration be paid by the mortgagee for the assignment of the judgment or term (1). But where the legal estate is affected with an express trust for the first incumbrancer, it will not avail a second incumbrancer to get it in after notice; as where the mortgagor was one of three trustees, and borrowed the trust monies on the security of a deposit of the title deeds of his copyholds, and then created a second equitable incumbrance, which last incumbrancer, after notice, purchased and took a conveyance from the mortgagor's assignees of the equity of redemption and legal estate (m). And to give an incumbrancer the advantage of a judgment, statute, or recognizance against an eigne mortgagee, the strict forms of law, as to inrolment and docketing, and now as to registration, must, it is conceived, have been complied with, or otherwise they will not avail (n). If a judgment, &c., be got

(c) Vide Collet v. De Gols, For. 70; Co. Bankrupt Laws, vol. 1, p. 300, and Foxcroft v. Devonshire, 2 Burr. 938; et supra, p. 249.

(d) 11 Ves. jun. 609.
(e) 2 Vern. 155.

(f) 2 Vern. 162, note.
(g) Vide supra, p. 382, 411.

(h) 12 & 13 Vict. c. 106; et vide supra, p. 410, 411.

(i) Edmunds v. Povey, 1 Vern. 187. Sadler v. Bush, 2 Vern. 30.

(k) Vide Willoughby v. Willoughby, 1 T. R. 763; and see the 8 & 9 Vict. c. 112, s. 1, intituled "An Act for rendering the assignment of satisfied terms

unnecessary," on which subject we would draw the reader's attention to the remarks in Mr. Joshua Williams's able work on the Principles of the Law of Real Property.

(1) Churchill v. Grove, 1 Ch. Ca. 35. Holt v. Mill, 2 Vern. 279; 1 Eq. Ca. Ab. 323.

(m) Allen v. Knight, 5 Hare, 272, affirmed on appeal, 16 L. J., Ch. 370, N. S.; et vide Sanders v. Dehew, 2 Vern.

in by a mortgagee, equity will not permit a prior incumbrancer to procure a surreptitious release (o).

It is laid down by Mr. Powell (p), on the authority of a dictum in Equity Cases Abridged (q), that if a first mortgagee purchase in a subsequent judgment, without the consent of the mortgagor, a mesne mortgagee may redeem without payment of both, because such a transaction tends to burthen the estate, without bettering the security of the mortgagee; a position which, it is submitted, is not tenable.

In a case where a married woman, having a life estate in lands to her separate use, granted in the year 1811 an annuity to A., and limited an equitable term for better securing it, which annuity was properly registered; and in 1820 she and her husband granted another annuity to B. out of the same life estate, and part of the consideration money was applied in paying off an outstanding legal mortgage, and the mortgage term was assigned to a trustee in trust for better securing B.'s annuity, but this annuity was not properly registered; and in 1821 B. took possession, and he and his executor remained in receipt of the rents till 1839, when a bill was filed against him and the grantor by A. to set aside B.'s annuity as invalid, and alleging payment of his own annuity up to 1820, which he could not prove, although the grantor, the co-defendant of B., admitted the fact; the Court dismissed his bill (as against B.) with costs, on the ground of the Statute of Limitations and laches, and refused an inquiry as to the payment of A.'s annuity (r). We have before seen that a subsequent mortgagee without notice, having a perfect title, will be preferred to a prior incumbrancer claiming under a defective assurance; but otherwise in case of notice (s).

Whether a mere equitable incumbrancer can in his defence use a plea of purchase for valuable consideration without notice, does not seem to be quite settled. In the case of Joyce v. De Moleyns, in the Court of Chancery in Ireland, an administration suit had been instituted by a bond creditor, for administration of the testator's estate, and delivery up by some of the defendants of the title deeds in their possession, which had been deposited with them by the heirat law of the testator, who had no beneficial interest in the estate. The depositees, by answer, claimed the benefit of a purchase for valuable consideration without notice, and Sir E. Sugden allowed it(t); in the late case of Frazer v. Jones (u), in which a mortgagor and mortgagee, on an assignment of the mortgage to a third party, practised a fraud on the assignee, by a false allegation that the mortgage deed had been already deposited to secure 1000l., the fact being that there was no such deposit made till afterwards; upon a bill filed by the assignee of the mortgagee against the depositary for delivery of the deeds and for foreclosure, the present Lord Chancellor, after deciding that the assignee had clearly priority over the depositary as being prior in point of time (the legal estate in part was outstanding), shewed a strong indication of opinion that, even though innocent of the fraud, the depositary was not entitled, as being a purchaser without notice, to retain the deeds as against the prior incumbrancer, on the

(q) Vol. 1, p. 326.

Searle v. Colt, 1 Y. & C., N. R. 36. (s) Bk. 2, Ch. 11.

(t) 2 J. & Lat. 374.

(u) 17 L. J., Ch. 353, N. S.

ground that the purchaser of an equity takes it subject to all prior equities; though he considered the case of Joyce v. De Moleyns to be a direct authority the other way; but as the case before him was decided on the ground of notice on the part of the depositary, he declined to give an express opinion on the subject. His Lordship appeared to consider such a defence only available by a party who, with the deeds, has taken a supposed conveyance of the legal fee from another who, though pretending to have the legal fee vested in him, has no estate at all or only a partial estate in the land; and not by a party who only contracts for an equity. And on this ground he distinguished the case before him and the case of Joyce v. De Moleyns from the case of Walwyn v. Lee decided by Lord Eldon (v), and which was cited as an express authority for his decision by Sir E. Sugden. In that case a mortgage in fee was made, with delivery of the title deeds, by the tenant for life, pretending to be owner of the fee, and Lord Eldon allowed a plea of purchase without notice against the remainderman.

We may remark, that a distinction may be drawn between the two cases of Joyce v. De Moleyns and Jones v. Frazer, in that the former was not the case of two parties claiming successive equities under the same person as the latter was, but was the case of a party claiming by a paramount title to that of the depositor, in which point it agrees with the facts in Walwyn v. Lee. But the general observations of both Judges remain untouched.

It must be observed, however, that in a case in the equity side of the Exchequer, the Court stated the law on this point in accordance with the view of Sir E. Sugden, and as being quite clear (w); though the case itself, however, hardly amounts to an authority, as the party claiming the deeds was only mortgagee for a term.

But in whatever way this point may be settled, it has been adjudged, and indeed would seem to follow from the doctrine laid down in Frazer v. Jones, that a second mortgagee who has taken a conveyance, with the title deeds, without notice of the first mortgage, will not be compelled in equity to deliver up the deeds (x); the first mortgagee will be left to his action of trover at law, where the right to the deeds accompanies the legal estate (y).

It should be remarked, however, that the authorities are conflicting, even upon the general question, whether the plea of a valuable consideration without notice, can in any case be used in defence against a plaintiff relying upon the legal estate (z); though the general principle seems established in the above cases of Walwyn v. Lee, Joyce v. De Moleyns, and Frazer v. Jones.

This mode of defence has been held not to apply to the case of an attorney's lien, as against a prior purchaser or mortgagee (a).

(v) 9 Ves. 24.

(w) Wiseman v. Westland, 1 Y. & J.

117.

(x) Head v. Egerton, 3 P. Wms. 280. (y) Hooper v. Ramsbottom, 6 Taunt. 12. Harrington v. Price, 3 B. & Ad. 170. Philips v. Robinson, 4 Bingh. 106.

(z) Fitzgerald v. Fauconbridge, Fitzg. 213. Jerrard v. Saunders, 2 Ves. jun. 454. Burlase v. Cook, 2 Freem. 24.

Parker v. Blythmore, 2 Eq. Ca. Ab. 79, pl. 1. Payne v. Compton, 2 Y. & C. 457, on one side, and Rogers v. Seale, 2 Freem. 84. Collins v. Archer, 1 R. & M. 284. Williams v. Lambe, 3 B. C. C. 264, on the other side; et vide Sugd. Vend. 1071, 11th edit.

(a) Smith v. Chichester, 2 Dr. & W. 393; et vide supra, p. 414.

CHAPTER II.

OF INTEREST.

THE act of the 12 Anne, st. 2, c. 16, has enacted, "that all bonds and assurances for the payment of any principal money, whereupon more than five per cent. shall be reserved or taken (a), shall be void." This law was afterwards relaxed in favour of mortgages made in England of estates in Ireland or the West Indies (b); the statute of the 14 Geo. 3, c. 79, having enacted, "that all mortgages and securities which, after the passing thereof, should be made and executed in Great Britain of or concerning any lands, tenements, hereditaments, slaves, cattle, or other things, lying and being in Ireland, or in any of his majesty's colonies, plantations, or dominions in the West Indies, or any estate or interest therein, to any of his majesty's subjects for securing the repayment of the sums of money thereon respectively to be really and bonâ fide lent, with interest for the same, and all bonds, covenants, and securities for payment of the same sum of money and interest, and all transfers or assignments which should be made and executed in Great Britain, of such mortgages, securities, or bonds, should be as good, valid, and effectual as such mortgages, securities, bonds, covenants, transfers, or assignments, would be if the same were made and executed in any island, plantation, country or place, where the lands, tenements, hereditaments, slaves, cattle, or other things to be mentioned or comprised in any such mortgage, security, transfer, or assignment as aforesaid, severally lay or were; and that none of his majesty's subjects should be subject or liable to any of the penalties or forfeitures of the said act of Queen Anne, by receiving or taking interest for the sum or sums of money lent on any such mortgage, security, bond, covenant, transfer, or assignment as aforesaid, so as the interest so to be received or taken did not exceed the rate of 6l. per cent. per annum. But it was declared that the act should not make good any such mortgage, security, bond, covenant, transfer, or assignment, where the lender or lenders of any sum or sums of money should knowingly advance or lend thereon more money than the lands, &c., in such mortgages, &c., should be, at the time or times of advancing or lending such sum or sums of money as

(a) As to this, vide 3 Atk. 154. Vide now 5 & 6 Wm. 4, c. 41, by which bills, notes, or mortgages for usurious consideration are not void, but to be considered as given for an illegal consideration, which is a provision in favour of

bona fide purchasers.

(b) That prior to the passing of the 14 Geo. 3, such a mortgage was within the 12 Anne, see Stapleton v. Conway, 3 Atk. 727; 1 Ves. 428; 2 Fonbl. Eq.

444.