deposit of this kind; for an equitable mortgage may be effected by mere word of mouth only; still, a written agreement has a decided advantage, not only as affording a more satisfactory proof of the transaction, but also from entitling the depositary to his costs out of the depositor's estate, in case the latter should happen to become bankrupt, which the former would not be entitled to where the agreement was by parol only, and therefore becomes rather an important matter where the borrower is a person amenable to the bankrupt laws: (Ex parte Brightwell, 1 Swanst. 3; Ex parte Thorp, 1 Mont. & Ayr. 441.)

Objections taken to written mortgage agreements.] The objection to a written agreement in transactions of this nature is the liability to the stamp duty, which if it attaches will, as we have just before remarked, be of precisely the same amount as upon actual mortgage of the property, the expense of which borrowers are of course anxious to avoid. This may be effectually done by merely altering the form of the writing from a formal agreement to a mere acknowledgment in writing, which, if properly penned, will require no ad valorem, or any other stamp duties whatever (Pyle v. Partridge, 15 Mees. & Wels. 20; Fancourt v. Thorpe, 15 L. J. (N. S.), 344, Q. B.; Tilsley on Stamp Acts, 476, 492.) Still, this precaution has been so little attended to, that it is the daily practice of bankers and mercantile men to make advances upon a large amount on unstamped memorandums, stating the deposit as that day made, and containing an agreement in express terms from the depositor to execute a valid mortgage at some future time, or whenever called upon; the consequence of this is that the instrument becomes chargeable with the full amount of ad valorem duties upon a mortgage, which might have been avoided altogether by adopting a different course of proceeding to accomplish precisely the same object.

How stamp duties may be avoided upon a written memorandum, on a deposit of the title deeds.]-To do this, the depositor, at the time he deposits the deeds, should, in the presence of a witness, verbally acknowledge that such deeds are deposited as a security for the money advanced, and that the depositor will execute a valid mortgage of the property when thereunto requested by the depositary. The witness should make a written memorandum of this at the time, and then read it over and explain the terms of it to the depo[P. C.]

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stor, and this memorandum (see the form 2 Con. Prec., Part W., Section L.. No. W., p. 22, 2nd ed.), the witness will he authorized to refer to for the purpose of refreshing his memory in case he mould at any fitare time be called upon to give evidence of the nature of the transaction. After this is done, 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 depositur to execute a wald mortgage to the depositary, or such person as he shall direct: (see the form 2 Con. Pree.. Part V., Sect. I., Nɔ. L. p. 25. 2nd edit.) Such a writing is admissible in evidence, although unstamped and the depositary would consequently become entitled to his costs in case of the depositary's bankruptcy: for so far from a formal stamped instrument being necessary to afford this protection, it has even been held that a letter acknowledging the object of the deposit, and written some months afterwards, was sufficient for this purpose: (Er parte Reynolds, 2 Mont. & Ayr. 104; S. C., 4 Dea. & Ch. 278.)

Distinction between an equitable mortgage by deposit of title deeds, and a deposit of share certificates.]—There is a material distinction between an equitable mortgage created by the deposit of title deeds relating to real estates, and a deposit of share certificates, such as those relating to railway shares, or the like. In the former case, as a general rule, actual delivery is necessary, yet when so delivered, the transaction is complete; whereas, in the latter case, actual delivery is not essential, if the proper notice be given to the secretary of the company, but unless such notice be given, the lien will not be consummated: (Goming v. Prescott, 2 You. & Coll. 488.) Wherever, therefore, an equitable mortgage is to be effected by a deposit of share certificates, or of documents of a like nature, no time should be lost in giving notice to the secretary, or other officer of the company who is authorized to receive notices of this nature: (see the forms of memorandum of deposit, and of notice, Con, Prec., Part V., Section I., Nos. VI. and VII., pp. 26 to 28, 2nd edit.)

Exceptions to the general rule requiring an actual deposit of the deeds.]-The general rule that an actual delivery of the title deeds is essential to create an equitable mortgage of the property to which they relate is not so inflexible as to admit of no exceptions; for where a party has only a partial interest in such property, so that it is not in his power to

make an actual deposit of the title deeds themselves, a memorandum, showing his intention to make the lien, will in such case suffice: (Ex parte Furley, 1 Mont. D. & D. 683.) Still, it seems doubtful whether a court of equity would give effect to a security of this kind, where it would tend to the prejudice of other parties interested in the property; as, for example, where the depositor is only interested in the land as one of several partners, and the property comprised in such deeds belongs to the partnership firm: (Ex parte Broadbent, 4 Dea. & Ch. 3.)

Depositor may create an equitable mortgage commensurate with his interest in the property.]—But in every other instance, it seems, a party may, by a deposit of the deeds, create an equitable mortgage commensurate with the duration of his estate and interest in the lands; hence, a copyholder may effect an equitable mortgage by a deposit of his copies of court roll (Whitbread v. Jordan, 1 You. & Coll, 325), as may also a lessee, by depositing his lease (Doe d. Pitt v. Hogg, 4 Dow. & Ry. 226), and this, notwithstanding it contains a covenant not to assign without licence.

No depositor can create a lien beyond his estate in the property.]-But no depositor can create a lien beyond the estate that he himself takes in the property to which the documents relate; consequently, if the depositor be only tenant for life, his life estate only will be charged: (Bates v. Danby, 2 Atk. 207.) And where a person takes no estate or interest in the property, he can create no lien whatever, and the rightful owner will be entitled to recover his documents from the depositary in whose hands the former may have placed them, without paying any portion of the debt for which they were deposited: (Bell v. Taylor, 8 Sim. 216.)

Depositary may create a lien to the same extent that he himself has upon the property.]-But this rule does not extend to deposits of the deeds made by a depositary, who has had such documents delivered to him by the rightful owner of the property to which they relate, for his equitable mortgage will so far confer an interest in the lands upon him, as to authorize him to create a lien upon them to the extent of his own mortgage debt, by delivering over such documents as a security to a third party: (Ex parte Smith, 2 Dea. & Ch. 271.) Still, such lien will be only binding on the original depositor to the amount of the sum for which he originally deposited them; consequently, a subsequent depositary would

be bound to deliver up the documents, upon receiving payment of that sum, without any regard to the amount of money which he himself may have advanced upon their security: (Hobson v. Melland, 2 Moo. & Rob. 342.)

Lien may extend to future as well as present advances.]— An equitable mortgage by deposit of deeds may be made to relate to future as well as past or present advances: (Ez parte Nettleship, 2 Mont. D. & D. 124.)

How memorandum should be penned when it is intended that the lien should extend to new partners of a firm.]—In cases of deposits of title deeds with bankers, merchants, or any partnership firm, by way of equitable mortgage, if, as is almost universally the case, it is intended that any new partners admitted to the partnerships are to have the benefit of the security, the intent should always be inserted in the memorandum which accompanies the deposit (see the form 2 Con. Prec., Part V., Sect. I., No. IV., p. 22, 2nd edit.); for although such an arrangement is capable of being proved by parol evidence, such proof must always be attended with expense and inconvenience, may be sometimes difficult of proof, and perhaps fail of proof altogether, from inability to produce sufficient evidence of the facts: (Ex parte Oakes re Waters, 2 M. D. & D. 236.)

Title not often investigated in mere equitable mortages.]— In equitable mortgages, it is not usual to put a mortgagor to the expense of the investigation of the title; still, no solicitor ought to advise a client to advance money upon a security of this kind, unless he has good reason to believe the title to be a safe one, and that the borrower is the lawful owner of the property.

Depositary's solicitor should see that all the proper documents are deposited.]-The depositary's solicitor should see that the whole of the documents are deposited, otherwise the depositary, by retaining some, and depositing them with a third party, might cause other claims to be set up, when questions must inevitably arise as to which party is to be entitled to a preference; or possibly a court of equity might, as sometimes has happened, refuse to enforce the claim of either: (Ex parte Pearse, 1 Buck, 525.)

Purpose for which deposit is made should be stated.]-The purpose for which such deposit is made should also be

stated at the time, for it seems that the mere fact of depositing deeds, even with a banker to whom the depositary may be indebted, does not of itself necessarily imply that such deposit is made as a security for the repayment, for they may be placed there for safe custody only: (Mountford v. Scott, 3 Mad. 34.) But a deposit of title deeds for the purpose of preparing a legal mortgage will create an equitable mortgage for the interim. The point, indeed, was at one time doubtful (Morris v. Wilkinson, 12 Ves. 192), but the validity of such an assurance is now clearly established: (Keys v. Williams, 3 You. & Coll. 62.)

IV. MORTGAGE BONDS AND WARRANTS OF ATTORNEY.

Bonds formerly required by way of collateral security.]—It was formerly the practice to require a bond by way of collateral security, to enforce the payment of a mortgage debt; but, as it is now established that debt will lie upon the covenants contained in the mortgage deed, which being under seal creates a debt by specialty, ranking equally with a bond debt, and equally binding on the devisees of the covenantor, the usual practice now is, except in some particular instances we shall hereafter notice, to dispense with the bond altogether, which only entails an unnecessary expense upon a mortgagor, without conferring any proportionate advantage to a mortgagee.

Warrant of attorney sometimes given as collateral security.] -But where the security is not very ample, a warrant of attorney is sometimes given to enter up judgment on the debt, as it also is to confess judgment in ejectment, where the mortgagor himself is in the possession of the mortgaged premises, in order to enable the mortgagee the more speedily to obtain the legal possession in case he should be desirous of doing so.