CH. 2, s. 1. Legal personal represen PT. II. T. 10, representative of a mortgagee of a freehold estate, or of a copyhold estate to which the mortgagee shall have been admitted, may, on payment of all sums secured by the convey legal mortgage, convey or surrender the mortgaged estate, mortgaged whether the mortgage be in form an assurance subject to redemption, or an assurance upon trust." 1112. estate of property. Judgments, &c., against who have been paid off. By the stat. 18 Vict. c. 15, s. 11, "where any legal or mortgagees equitable estate or interest, or any disposing power in or over any lands, tenements, or hereditaments, shall, under any conveyance or other instrument executed after the passing of this Act, become vested in any person as a purchaser or mortgagee for valuable consideration, such lands, tenements, or hereditaments shall not be taken in execution under any writ of elegit, or other writ of execution, to be sued upon any judgment, or any decree order, or rule against any mortgagee or mortgagees thereof, who shall have been paid off prior to or at the time of the execution of such conveyance, nor shall any such judgment, decree, order, or rule, or the money thereby secured be a charge upon such lands, tenements, or hereditaments, so vested in purchasers or mortgagees, nor shall such lands, tenements, or hereditaments so vested in purchasers or mortgagees be extended or taken in execution, or rendered liable under any writ of extent or writ of execution or other process issued by or on behalf of her Majesty, her heirs or successors, in respect of any judgment, statute, or recognisance obtained against or entered into by, or inquisition found against, or obligation or specialty made by, or acceptance of office by any mortgagee or mortgagees, whereby he or they hath or have become or shall become a debtor or accountant, or debtors or accountants to the Crown, where such mortgagee or mortgagees shall have been paid off prior to or at the time of the execution of such conveyance as aforesaid." 1113. In consequence of this enactment, where mortgagees are OF LEGAL MORTGAGES OF REAL PROPERTY. 433 CH. 2, s. 1. paid off prior to or at the time of the execution of any con- PT. II. T. 10, veyance or subsequent mortgage, creditors having judgments against such mortgagees need not concur in such conveyance or subsequent mortgage (2). 1114. Death of XXIII. Where a person makes a mortgage in fee, and XXIII. dies intestate without heirs, the equity of redemption does mortgagor, not escheat to the Crown, but belongs to the mortgagee, w subject to the debts of the mortgagor (a). 1115. intestate, and without executors of to estate. As the personal representatives are entitled to the money, Right of and as the land is in equity a pledge for the payment, it mortgagee follows, that, if the pledge is forfeited, the personal representative must be also entitled to the land composing the pledge; and therefore if the mortgagee dies, and his heir obtains a release of the equity of redemption, or the land becomes irredeemable from length of time, it will nevertheless belong to the personal representative, and the heir will be a trustee for him (b). 1116. SECTION II. Of Equitable Mortgages. CH. 2, s. 2. How Besides mortgages created by a formal instrument, and PT. II. T. 10, valid at law, as well as in equity, there are equitable mortgages. These are created either by a written instrument, created. or by a deposit of deeds or copies of court roll, with or without writing (c). Any written agreement or directions or other instrument in writing, showing that it was the intention of a debtor thereby to make his land or other (z) Greaves v. Wilson (No. 2), 25 Beav. 434. (a) Beale v. Symonds, 16 Beav. 406. (b) Coote Mortg. 3rd ed. 510. VOL. I. (c) 2 Spence's Eq. Jur. 777; CH. 2, s. 2. PT. II. T. 10, property a security for the debt, will be equivalent in equity to an actual mortgage by deed or to a pledge (d). And a deposit of all or some of the material deeds or documents of title constitutes an equitable mortgage, though they do not show a good title in the depositor (as where they do not comprise the conveyance to him), if made with a creditor, or with some third person on his behalf, whether with or without any written memorandum, and even without a word passing, and whether as security for an antecedent debt, or on a fresh loan of money, if received by him (so far as it would appear) in good faith, and in the belief that they were the title deeds of the estate (e). Such deposit is of itself evidence of an agreement for a legal mortgage of the estate, of which agreement the creditor may avail himself, in Equity, as of an agreement in writing for that purpose. And if, by agreement, a vendor keeps the title deeds and conveyance of the estate to the purchaser in his own custody, as a security for the purchase money unpaid, he has an equitable mortgage on the estate (ƒ). And an equitable mortgagee may himself create an equitable mortgage by depositing the deeds with a third person, although he does not deliver over the memorandum (g). 1117. Further advances. The meaning and object of the deposit may be explained by parol evidence. And evidence is admissible to show that a delivery of deeds to a third person, by a person not being the party whose estate is sought to be charged, even though no money passed at the time, constituted an equitable mortgage (h). 1118. The deposit will cover subsequent advances, if it clearly (d) 2 Spence's Eq. Jur. 777779. (e) Story's Eq. Jur. § 1020; 2 Spence's Eq. Jur. 781; Coote Mortg. 3rd ed. 165, 169; Lacon v. Allen, 3 Drewry, 579; Roberts v. Croft, 24 (f) Sugd. Concise View, 536. CH. 2, s. 2. appear that they were made upon the faith of that security, Pr. II. T. 10, or that the original deposit was continued with an agreement for a further advance (i). 1119. Where the Court is satisfied of the good faith of the person who has got a prior equitable charge, and that he was led to believe that he had got the necessary deeds, the Court will not hold that he was bound to examine the deeds. And if he does not, and they do not show any title in the mortgagor, yet such equitable mortgagee is entitled to priority, even over a second equitable mortgagee, without notice, who has deeds which show a complete title in the mortgagor, and has a memorandum of deposit (j). This is only defensible on the ground of public convenience, in facilitating loans by means of equitable mortgages. It illustrates the great danger of lending on such securities. 1120. An equitable mortgagee by deposit of title deeds will Priority. have preference over a subsequent purchaser or mortgagee of the legal estate with notice, but not over a subsequent purchaser or mortgagee, who has the legal estate, and had no notice of such equitable mortgage (k). 1121. An equitable deposit, with memorandum of charge, by a devisee, is an alienation which pro tanto prevents a creditor of the testator from subsequently obtaining a charge on the estate, as assets under the stat. 3 & 4 Will. 4, c. 104 (l). 1122. An equitable incumbrancer on property, who has distinct notice of a prior incumbrance, cannot, by concealing his knowledge from his assignee, give such assignee a better right than that which he himself possesses (m). 1123. Where a trustee of funds invested on mortgage in his own name deposits the deeds without notice of the trust, to secure an advance to himself, the cestuis que trust are (i) 2 Spence's Eq. Jur. 781; Coote Mortg. 3rd ed. 171. (j) Dixon v. Muckleston, L. R. 8 Ch. Ap. 155. (k) Coote Mortg. 3rd ed. 170. CH. 2, s. 2. PT. II. T. 10, entitled to priority over the equitable mortgagee, and to delivery up of the deeds (n). Fixtures. Interest 1124. An equitable mortgagee by deposit is a purchaser within the stat. of 27 Eliz. c. 4, so as to avoid a prior voluntary settlement in equity, though not at law. So he may avoid such a settlement as a creditor under the 13 Eliz. c. 5, if he was a creditor at the time of the settlement (o). 1125. Under an equitable mortgage of a lease, even by a mere deposit without any memorandum, the tenant's fixtures will be included (p). 1126. Where a simple contract debt has been secured by a deposit of deeds, unaccompanied by any stipulation as to interest, or any memorandum from which an exclusion of interest can be inferred, the mortgagee is entitled to interest at the rate of £4 per cent., on the principle that a deposit of deeds to secure a loan is to be considered as an agreement to execute a mortgage of the property comprised in the deeds, with interest (q). 1127. Pr. II. T. 10, gage and a pledge dis SECTION III. Of Mortgages of Personal Property. I. A mortgage of personal property is a transfer of the I. A mort- ownership itself, subject to be defeated by the performance of the condition within a certain time. But a pledge only passes the possession, or at most a special property to the pledgee, with a right of retainer till the debt is paid or the engagement is fulfilled (r). tinguished from each other. (n) Newton v. Newton, L. R. 6 Eq. (0) Coote Mortg. 3rd ed. 170. 1128. (q) In re Kerr's Policy, L. R. 8 Eq. 331. (r) Story's Eq. Jur. § 1030; 2 Spence's Eq. Jur. 771. |