sions similar to those last before mentioned, and directs that every order shall be made upon petition (d). The Lord Chancellor refused to appoint a person to convey in the place of a mortgagee, whose lunacy was contested (e); and on a petition for a transfer of stock by a lunatic trustee, the Court of Chancery refused to adopt the fact of the lunacy as found in a suit in the Exchequer (f). The order of reference to the Master with respect to a lunatic trustee or mortgagee, must be made by the Lord Chancellor, or the person intrusted with the care of lunatics by the king's sign manual (g). We have already mentioned, that the expenses of the petition and other proceedings in order to obtain a reconveyance from a lunatic mortgagee, must be borne by the lunatic's estate, unless he is a trustee and the mortgagor had notice of the fact (h). The 13th section of this act makes it compulsory in any committee, infant, or other person directed by the act to convey, to make and execute such conveyance. (d) Sects. 3-5, 11. (e) In re Walker, Cr. & Ph. 147. (g) In re Shorrocks, 1 M. & C. 31. (h) In re Townsend; In re Lewes, supra. CHAPTER V. OF THE RESTRICTIONS AND DISABILITIES ANNEXED TO THE ESTATE OF THE MORTGAGEE. EQUITY having extended its protection to the estate of the mortgagor, and decided that until foreclosure, the mortgage (although in fee) is but a security for the debt, and will not permit the mortgagee to take an undue advantage of the necessities of the mortgagor, or of the legal incidents accruing at common law to the estate of the mortgagee in the land. It has therefore imposed some considerable restrictions and even disabilities on the mortgagee, so long as he retains that character. The Amongst the latter may be reckoned his inability to accept a valid lease from the mortgagor, even, as it should seem, at a fair rent. authority for this position is a case heard in Ireland before Lord Redesdale (a). The facts were, Edward Webb mortgaged to Rorke, and some years afterwards granted a lease of part of the land to Rorke for a term of 999 years, at a yearly rent. A bill was filed by the heirs of Webb, against the heirs and executors of Rorke, charging that the lease was made at a gross undervalue, and in consequence of threats of foreclosure, and prayed that the lease and mortgage deed might be brought into Court, and the defendant might account for the real value of the lands. The answer insisted that the lands were let at a fair value and without threat. Two issues at law were directed, first, whether the lease was voluntarily granted, and secondly, whether the rent reserved was a fair rent. The jury found in the affirmative on both issues. On the cause coming on to be heard in equity, Lord Redesdale considered he was mistaken in directing the issues at law, and decreed the lease to be set aside as contrary to the principles of public policy, and the spirit of the laws for the prevention of usurious contracts, and ordered the Master to take an account of principal and interest, and as the rent did not appear fraudulent, he was to charge the defendant with such rent up to the first day of payment after filing the bill, and inquire whether the mortgagee had advanced any sums of money in permanent improvements of the land, and if so, to add the same to the mortgage debt, and calculate interest thereon. The case of Webb v. Rorke had been preceded by a case heard also before Lord Redesdale (b), in which a lease from a mortgagor to a mortgagee had been set aside, but in that case there were circumstances of oppression and fraud, and consequently it is not an authority for a (a) Webb v. Rorke, 2 Sch. & Lef. 661. (b) Gubbins v. Creed, 2 Sch. & Lef. 214. general rule; but the case of Webb v. Rorke was free from such circumstances, and consequently if it is to stand as law, establishes the principle, that if a mortgagee accepts a lease from the mortgagor, he takes it subject to its being set aside in equity, however fair may be its provisions (c). all A further considerable disability annexed to his estate is, that although ne, he is at law the actual owner, and consequently can make a good legal-hist title, yet he cannot in equity make a valid or binding lease, unless it seems there be an absolute necessity for it. This was decided in a case (d) in which a mortgagor having filed his bill for a re-conveyance, m the mortgagee answered that he had made a lease of the premises for five years, at a yearly rent, with a covenant that after the expiration of the five years, the lessee might hold it for four years longer, and that if the mortgagor would grant such additional lease, he would re-convey. This case being heard at the Rolls, a decree was obtained for the defendant, but on appeal, Lord Macclesfield was of opinion, that the mortgagee, before foreclosure of the equity, could not lease the premises for years to bind the mortgagor unless to avoid an apparent loss, and merely on necessity, and thereupon he reversed the decree at the Rolls. The Courts of equity, fearful of opening a door to fraud and usury, have imposed a restriction on the mortgagee that he shall not be permitted to make any charge on the estate for his personal trouble (e), or appoint himself receiver of the estate (f), although under an express agreement with the mortgagor for that purpose. It has been already explained that the mortgagee of a West India estate, when in possession, cannot charge commission as consignee (g). In a case at common law (h) it appeared, that a mortgage deed contained a proviso that in order the better to secure the more regular and punctual payment of the interest of the mortgage monics, the mortgagee should be in the receipt of the rents of the premises, (which were messuages in the county of Middlesex), and should be allowed as receiver 401. a year for his trouble, and after retention thereof and of the interest, should pay the residue to the mortgagor. An action qui tam was brought against the mortgagee for usury, and a verdict obtained by the plaintiff, subject to the opinion of the Court, whether the action was properly laid in London, the rent being received in Middlesex, but accounted for in London, where the contract was made. The Court held, that the usury was not complete until the settlement of the account which took place in London, and therefore the venue was well laid. The legislature has also imposed restrictions on the mortgagee as well in respect to his right of voting for the return of members to Parliament as to his privilege of being elected. The 2 & 3 Wm. 4 (i), enacts that no person shall be allowed to have any vote in the election of a knight or knights of the shire, for or by reason of any trust estate or mortgage, unless such trustee or mortgagee be in actual possession or receipt of the (c) Et vide p. 178, supra, and Bk. 5, Ch. 2, infra. (d) Hungerford v. Clay, 9 Mod. 1. (e) Supra, Bk. 3, Ch. 4. (ƒ) Ibid. (g) Vide supra, Bk. 3, Ch. 4. (h) Scott v. Brest, 2 T. R. 238. rents and profits of the same estate, and the 9 Anne, c. 5, provides, that no person shall be qualified to sit in the House of Commons within the meaning of the act, by virtue of any mortgage whereof the equity of redemption is in any other persons, unless the mortgagee shall have been in possession of the mortgaged premises for seven years before the time of his election (k). A mortgagee in possession being considered by equity in some sort as a trustee of the estate, and as such accountable for the rents and profits, it behoves him to be very careful to whom he assigns his mortgage unless with the concurrence of the mortgagor, for if he assign to an insolvent person, he will be liable to account for the rents as well after as before the assignment (7), for it is a breach of trust in him to assign the pledge to a person insolvent. But it is not every interference with the management of the estate by a mortgagee that will make him for all purposes of account a mortgagee in possession (m). In a modern case (n), an estate being already in mortgage was devised in strict settlement; the mortgagee permitted the tenant for life in possession to run the interest in arrear, and afterwards purchased the estate for life, and entered into possession and received the rents for about three years, when the tenant for life died. The plaintiff filed his bill of foreclosure against the remainderman; and the only question which arose was, whether in taking the accounts, the plaintiff was to be charged not only for the interest accrued since his taking possession, but also with the arrears due at the time of his purchase, the defendant insisting that the surplus rents received by him after deducting the current interest ought to be applied in reduction of the arrears. The point was admitted to be new-for the plaintiff it was urged that to make good the defendant's claim, it must rest on the ground of lien for the arrears, which did not subsist between the tenant for life and remainderman. For the defendant it was urged that the tenant for life was bound to keep down the interest, and the mortgagee having notice of that equity, purchased subject to it. The Master of the Rolls held, that inasmuch as, if the mortgagee had entered in that capacity, the surplus rents must have been applied in discharge of the arrears, he should not be allowed to prejudice the rights of the reversioner by entering as a purchaser. The decree was, that an account should be taken of principal, interest, and costs, and of the rents and profits received by the plaintiff, which were to be applied, first in payment of the interest, which accrued due subsequently to his entering into possession, and in the next place, so far as they would extend, in satisfaction of the preceding arrears. In an earlier case (o) a term was created for raising portions out of annual profits. The mortgagee permitted the tenant for life to enjoy the estate under the usual clause, that it should be lawful for the mortgagor to take the profits until default: the Court held, that the rents being received by the tenant for life, with the permission of the mort (k) Vide supra, Bk. 3, Ch. 4. (1) 1 Eq. Ca. Ab. 327, supra, p. 303, and Bk. 3, Ch. 4. (m) Faulkner v. Daniel, per Wigram, V. C., 3 Hare, 220. (n) Lord Penrhyn v. Hughes, 5 Ves. jun. 99; et vide infra, Bk. 5, Ch. 2. (0) Ivy v. Gilbert, 2 P. Wms. 20. gagee, it was the same as if the mortgagee had let the estate to any other person, and therefore the profits received by the tenant for life with the mortgagee's permission, should be considered as if received by the mortgagee himself, and be accounted for accordingly, and that he might have his remedy over against the personal representatives of the tenant for life. On the same principle, where a creditor received from his debtor an assignment of a debt due from a third person as a security for his demand, and sued out execution upon the judgment, but by his neglect in levying, the debt assigned became irrecoverable; it was held that he must bear the loss, although the assignment contained the usual covenant for payment of his debt (p). On the like principle of trusteeship, equity holds, that if leaseholds be in mortgage, and the mortgagee renew, he will take the renewed lease, subject to the like equity as was subsisting in the old lease, even although there was only what is called a tenant right of renewal (q); and if an advowson be in mortgage, and the living become vacant, the mortgagor and not the mortgagee shall present (r), nor will equity permit the mortgagor to agree to the contrary (s), for the mortgagee shall have no benefit beyond his principal, interest, and costs. If the mortgagee present, and his clerk be admitted, the mortgagor may, by bill in equity, compel him to resign, but the bill must be filed within six months after the death of the last incumbent (t). A further restriction on the estate of the mortgagee is, that he shall not be permitted (if in possession) to waste the estate (u); if he proceed to fell timber, an account will be decreed and the produce applied, first, in payment of the interest, and then in sinking the principal, and equity will enjoin him, unless the security prove defective, in which case the Court will not restrain him from felling timber, the produce being of course applied in ease of the estate (v). So if he unnecessarily pulls down buildings, and erects new buildings without the consent of the mortgagor, he is liable for any loss of rent which is thereby occasioned, and will not be allowed for lasting improvements and repairs, if the result of the whole is that the value of the property is not increased (w); and indeed, according to the judgment of the Master of the Rolls in the last mentioned case, he will not be allowed for substantial improvements, unless done with the consent of or acquiesced in after notice by the mortgagor (x). It may be almost superfluous to notice, that the mortgagee must take the estate subject to the acts of forfeiture, &c., committed by the mortgagor. If an authority for the position be requisite, the following (y) is in point:—an estate had, on marriage, been limited in strict settle (p) Williams v. Price, 1 S. & S. 581. (g) Supra, p. 122. (r) Supra, p. 202, 33. (s) Supra, p. 202. (t) Gardiner v. Griffith, 2 P. Wms. 404; supra. (u) Hanson v. Derby, 2 Vern. 392. (v) Witherington v. Bankes, Sel. Ch. Ca. 31. (w) Sandon v. Hooper, 6 Beav. 246, affirmed on appeal, 14 L. J., Ch. 120, N. S.; et vide supra, Bk. 3, Ch. 4. (x) Sandon v. Hooper, supra; but see the same case on appeal. (y) Lady Whetstone v. Sainsbury, Pre. Ch. 591; sed vide Willis v. Fineux, ibid. 108. |