CHAPTER VI. MORTGAGES BY WAY OF FURTHER CHARGE; TRANSFERS OF MORTGAGE; AND ASSIGNMENT OF BONDS. I. MORTGAGES BY WAY OF FURTHER CHARGE. II. TRANSFERS OF MORTGAGES. 1. Where the mortgagor is not a concurring party. III. ASSIGNMENT OF BONDS. I. MORTGAGES BY WAY OF FURTHER CHARGE. Usual practice in mortgages by way of further charge.]—If a mortgagor requires a further sum of money, and the mortgagee is willing to advance it, the usual practice is to secure its repayment by way of a further charge upon the mortgaged premises. This, if the property is of ample value, is a very simple transaction, because the title having been already investigated, little, if anything more remains to be done than to settle the terms and proceed at once to prepare the assurance by which the further charge is to be secured. Still, before doing this, the mortgagee should satisfy himself there are no subsequent incumbrances on the property; for notwithstanding a mortgagee will not be prejudiced by any intermediate incumbrances of which he has no notice, still parties may be fixed with what is considered as notice in the eye of the law without having any actual knowledge whatever of the transaction; as in the case of notice to the agent, which in law is considered as notice to the principal, although the latter may be utterly ignorant of the whole matter. Where a mortgagee incurs the greatest risk in transactions of this kind, is where the same solicitor acts both on behalf of himself and the mortgagor, who, if he has notice of any mesne incumbrance, will have the same effect as actual notice to the mortgagee himself, the latter of whom, in consequence, will lose all advantage in the priority he would have secured in the absence of such notice, and the mesne incumbrance will thus become preferred to the further charge: (Montague v. Ratcliffe, 2 Fonbl. Eq. 434, n. p.) Distinction as to priority, where original mortgage is for a fixed sum, and when made to secure future advances.]—It must, however, be observed, that the above rule only holds where the original mortgage is for a certain fixed and stated sum; for where a mortgage is made to secure further advances, a subsequent loan in pursuance of those terms would obtain a priority over a second mortgage, notwithstanding the first mortgagee had express notice of the second mortgage at the time he made his further advance: (Gordon v. Graham, 2 Vin. Abr. 52; Coote Mort. 513; 2 Hughes Pract. Mort. 4.) Where additional property is added.]-It often happens that where a further charge is made, additional property is either given, or a larger estate than he took under his original mortgage is granted to the mortgagee, in consideration of his further advance; as where the mortgage was by demise, and the further charge is to be in fee, which latter assurance is made to secure the original advance as well as the further charge. If additional property is added, the title to this property ought of course to undergo the same investigation as upon an original mortgage; but when the estate of the mortgagee is merely to be enlarged, if there has been a proper investigation of the title prior to the original mortgage, a reinvestigation would be superfluous. Assurances by way of further charge, how usually prepared.]-Further charges are made either by indorsement on the original mortgage deed, or by a distinct instrument; but in the country, particularly in the case of small advances, where the amount of stamp duty is small, a preference is given to a distinct instrument to save the trouble and expense of sending the original mortgage to London to get a stamp impressed upon the indorsed further charge, the costs of which would often exceed the actual amount of the stamp duties, the latter of which are usually considered the most vexations expense connected with a mortgage transaction. But when the deed of further charge is executed in London, where the [P. C.] 20 instrument may be stamped without difficulty or additional expense, it is found convenient to have the further charge indorsed on the original mortgage deed, for the purpose of keeping the whole subject-matter of the business connected together. Where the further charge is to convert arrears of interest into principal.]-Making the further charge by indorsement on the original mortgage is also found particularly useful where the further charge is merely given to convert arrears of interest into principal, so as to carry future interest. This may be done by a very short form, stating the amount of interest then owing on the within-written security, and that the same shall be a further charge on the mortgaged premises, and shall carry interest at the rate therein mentioned: (see the form 2 Hughes Pract. Mort., Prec. I., No. III., p. 18.) How arrears of interest may be converted into principal.]— There is no doubt whatever of the legality of a charge of this kind; for although, as a general rule, interest cannot be so reserved in a mortgage deed as to carry interest, still this only holds as long as the interest is payable as such; for after it has been due, and is an actual existing debt, it may then be converted into principal, and thus be made the subjectmatter of any agreement the mortgagor may enter into respecting it, and may be made to carry interest in the same manner as may be reserved upon any other sums of money owing from the one party to another: (Bonham v. Riley, 2 Bro. C. C. 2; Bickham v. Cross, 2 Ves. 471.) How deed of further charge is usually penned.]—A deed of simple further charge, after describing the parties, recites the original mortgage, and that the principal money and the amount of interest, if any, that is then due, and the request of the mortgagor for a further advance on the security of the mortgaged premises, and then the mortgagor further charges such mortgaged premises with the further advance, and future interest to accrue due thereon, in addition to the original mortgage debt and interest then already secured; and, where the original mortgage deed contains a power of sale, it is also declared that such power of sale shall extend to the further advance, which further advance and interest the mortgagor then proceeds to covenant to pay, and also to execute any further assurances, for the purposes aforesaid, which the mortgagee may require: (see the form 2 Con. Prec., Part V., Section VIII., No. I., pp. 319, 324, 2nd edit.) Where the further charge is to cover future advances as well as an existing debt.]—If the further charge is intended to cover future advances as well as a present advance or existing debt, the deed, after describing the parties and reciting the original mortgage, and the amount of principal moneys and interest, if any, then due thereon, and also that the mortgagor requires a further advance, and that, in order to secure the same and such future advances as the mortgagee may make him, he will further charge the mortgaged premises therewith, then proceeds to make such further charge in the form we have just before pointed out: (see a form of this kind 2 Con. Prec., Part V., Section VIII., No. III., pp. 327, 328, 2nd edit.) Where more property is added by way of additional security.]-Where more property is added by way of additional security upon a further charge, the original mortgage is usually recited, as also the amount of principal and interest due thereon, and the agreement for the further advance; the mortgagor then proceeds to further charge the mortgaged premises with the further advance and interest in addition to the principal moneys and interest already secured thereon, and then conveys or assigns the additional property, according to the nature and quality of such property, to the mortgagee, with a declaration that the power of sale contained in the original mortgage deed shall extend to the additional property and further charge (see the form 2 Con. Prec., Part V., Section VIII., No. IV., pp. 331, 334, 2nd edit.), or it may contain a fresh proviso for redemption and fresh powers of sale: (see the form ib. No. IV., p. 331.) Propriety of inserting a power for mortgagor to redeem in parcels.]-Where additional property is given upon a further charge, or even where distinct estates are embraced in an original mortgage security, it is advantageous for the mortgagor to be authorized to redeem in parcels; for in the absence of a stipulation to that effect, where several estates are all mortgaged by the same mortgagor to the same mortgagee, the former will not be entitled to redeem any one or more of such estates without redeeming the whole of them, notwithstanding such mortgages may have been made at distinct and separate times to secure several and distinct debts, and by several and distinct assurances: (Trebourg v. Lord Pomfret, cited Ambl. 733; Roe ex dem. Kaye v. Soley, 2 W. Blackst. 726.) Neither will the circumstance that the property comprised in such mortgages is of different tenures, as where part consists of freehold, and part of leasehold or copyhold estates, vary the rule in any respect: (Jones v. Smith, 2 Ves. jun. 376; 6 ib. 229, in notis.) Where household furniture, &c., is assigned by way of additional security.]—It often happens that where a further advance is made upon a furnished dwelling-house, the furniture is assigned by way of additional security. Whenever this occurs, care must be taken to comply with all the conditions prescribed by the statute 17 & 18 Vict. c. 36, relating to bills of sale of furniture and other moveable effects (as to which see ante, p. 108); otherwise the assignment will be inoperative as against the mortgagor's assignees in case of his becoming bankrupt or insolvent, or sheriffs' officers and other persons seizing the goods, &c., in execution of any process against him, whenever the same shall continue to remain in his apparent possession: (17 & 18 Vict. c. 36, s. 1.) II. TRANSFERS OF MORTGAGES. 1. Where the mortgagor is not a concurring party. Right of transfer incidental to a mortgage security.]—The right to transfer a mortgage, being one of the inseparable properties of a mortgage security, may be exercised by the mortgagee either with or without the mortgagor's concurrence or consent; nor will the express dissent of the latter to the transfer affect the validity of the assurance in the slightest degree. Still, it has generally been considered advisable to make the mortgagor a party, not so much with a view of conferring any additional strength to the transfer, as for the purpose of preventing questions from being raised at any future day as to what amount of money really was due from him upon the mortgage security at the time of its transfer, a mortgagor being permitted to set off any payments made by him to the mortgagee on account of the mortgage against any transferree, who without his consent takes a transfer of the mortgage security, the latter of whom, under such circumstances, must take such transfer upon the same terms as the mortgagee himself held the property: (Ashenhurst v. James, 3 Atk. 270; Bradwell v. Catchpole, 3 Swanst. 79.) And a mortgagor will be entitled to set-off payments |