Covenants.

Power of

sale.

Life estates.

and may be recommended for use in all cases except where the liability under the lease is nominal.

Care must be taken in a mortgage by demise not to insert any covenants as to insurance or otherwise repugnant to those in the head lease. Thus if the covenant in the head lease is to insure in the name of the lessor, the covenant in the mortgage must not be to insure in the name of the mortgagee, for then the mortgagor would have to keep up two insurances instead of one.

The express power of sale, if inserted, should be made exercisable not only in the events in which it is exercisable in the case of freeholds, but also on breach by the mortgagor of any of the covenants in the lease.

Prior to 1883 mortgages of life estates in realty were effected by demise for a term, instead of assignment, owing to an opinion generally held that, after an absolute assignment, all powers appendant to the life estate ceased to be exercisable. The operative words were "bargain, sell, and demise," which (there being a bargain and sale of a chattel interest for value) raised a use, and therefore vested the legal estate for the term in the mortgagee without inrolment under the Statute of Inrolments (ante, p. 12) and without entry (ante, p. 13). The habendum was "unto [the mortgagee] his executors, administrators, and assigns for ninetynine years, if the mortgagor should so long live," and then followed a proviso for redemption. It has, however, been decided that the form of the mortgage is immaterial; that the powers annexed to the life estate remain exercisable notwithstanding the assignment, but only with the consent of the mortgagee if such exercise might be to his prejudice (n). Mortgages of life estates since 1882 are always made by assignment, as the powers vested in the tenant for life by the S. L. Acts, 1882 to 1890, remain exercisable by him notwithstanding the mortgage, though not so as to affect the interest of the mortgagee without his consent, except that

(n) Alexander v. Mills, L. R. 6 Ch. 124; Re Bedingfeld and Herring's Contract (1893), 2 Ch. 332.

INTERPRETATION CLAUSE.

his consent is not required to leases at rack-rent made by a mortgagor in possession; S. L. A. 1882, s. 50.

tation

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The phrase "the said [mortgagor] his heirs and assigns," Interpreor in the case of leaseholds or personalty, "the said [mort- clause. gagor] his executors, administrators, and assigns," and in the case of both freeholds, leaseholds, and personalty, “the said [mortgagee] his executors, administrators, and assigns," or in the case of mortgages on a joint account, "the said [mortgagees] or the survivors or survivor of them, or the executors or administrators of such survivor, their or his assigns," constantly recurs throughout the mortgage, though in mortgages made since 1881 the latter phrase is rarely, if ever, necessary. Various plans have been suggested for avoiding this. Sometimes an interpretation clause is inserted, either at the beginning or at the end of the deed (2 K. & E. 61, note (c)), defining the words "mortgagor," and "mortgagee," or "mortgagees," so as to include (where such interpretation is not excluded by or repugnant to the context) in the case of the mortgagor, his heirs and assigns; or, for leaseholds or personalty, his executors, administrators, and assigns; and, in the case of the mortgagee, his executors, administrators, and assigns; or, in the case of several mortgagees, the survivors or survivor of the mortgagees, and the executors or administrators of such survivor, their or his assigns. If this is done, the words "heirs and assigns," or for leaseholds or personalty the words "executors, administrators, and assigns," occurring alone will, in the case of the mortgagor, be omitted; and the words "executors, administrators, and assigns," in the case of the mortgagee, and the words "the survivors or survivor of them, or the executors or administrators of such survivor, their or his assigns" in the case of the mortgagees, will be omitted: but, wherever the words "heirs, executors, and administrators" occur together in the full forms, whether in the case of the mortgagor, mortgagee, or mortgagees, they will be retained. In mortgages of freeholds or copyholds, the words "heirs and assigns" must, in the case of the

Costs.

mortgagee or mortgagees be retained wherever they occur in the full forms, because the definition of the mortgagee or mortgagees excludes the heirs. It has been suggested (2 K. & E. 61, note (c)) that as, owing to the similarity of the words "mortgagor" and "mortgagee," there is a risk of clerical errors from their employment, it might be better to substitute other words, such as owner and "mortgagee," or "debtor" and "creditor."

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It is worth noticing that, although it is the invariable practice for the mortgagor to pay the costs of the mortgagee, even if the negotiation goes off so that no mortgage is ever effected, there is, in the absence of any special agreement (see the form 2 K. & E. 254), no such privity between the mortgagor and the mortgagee's solicitor as to enable the latter to recover his costs as against the mortgagor; he has a remedy against his own client, the mortgagee, who has his remedy over against the mortgagor (o).

(0) Rigley v. Daykin, 2 Y. & J. 83; Wilkinson v. Grant, 18 C. B. 319; Pratt v. Vizard, 5 B. & Ad. 808; Re Roberts, 43 Ch. D. 52.

As to the costs of a solicitor mortgagee, see the Mortgagees' Legal Costs Act, 1895 (58 & 59 Vict. c. 25), and the note 2 K. & E. 61.

CHAPTER VII.

ASSIGNMENTS AND MORTGAGES OF PERSONALTY.

PERSONAL property can be divided (see M. L. P. P. 1, Wms. P. P. 27) into that which has an actual physical existence, as moveable chattels, and that which is incorporeal and has only a notional existence. Property of the latter kind is often called a chose in action; but, strictly speaking, this phrase should be restricted to certain kinds only of property having a notional existence.

PART I. PERSONAL CHATTELS.

The property in personal chattels may be transferred by Transfer of property in delivery or by a deed. In either case the transfer may be personal voluntary, i.e., by way of gift, or for valuable consideration, chattels, i.e., on a marriage, or on a sale or mortgage. The subject of transfers effected otherwise than by deed is discussed fully in M. L. P. P., chapters iii. to vi. inclusive, and in Wms. P. P. Pt. I. chap. ii.

A deed by which the property in personal chattels is Bill of Sale. transferred is called a Bill of Sale"; but, as a Bill of Sale

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is very rarely used except on the occasion of a mortgage of chattels, the phrase used without explanation generally means such a mortgage. It should be observed that, though the property in the mortgaged chattels is transferred, the possession is retained by the mortgagor; whereas if goods are pledged, they are given into the possession of the lender (a).

(a) Mills v. Charlesworth 25 Q. B. D. 421, at p. 424.

Mortgage
Bills of
Sale (b).

Volunteers.

Assignor remaining

in possession.

Mortgages (not including debentures of companies) of personal chattels are subject to certain requirements under the Bills of Sale Acts, 1878 and 1882 (41 & 42 Vict. c. 31, and 45 & 46 Vict. c. 43). By "personal chattels" are meant, for the purposes of these Acts, goods, furniture, and other articles capable of complete transfer by delivery, including "trade machinery," i.e., machinery used in any workshop or factory (not being fixed motive power, fixed power machinery, or pipes for steam, gas, or water): and also, if assigned or charged by an instrument not containing a conveyance of or charge on the buildings or land to which they are annexed, fixtures and growing crops. A mortgage Bill of Sale is void, except as against the grantor, in respect of (a) chattels not specifically described in a schedule, (B) chattels of which the grantor was not the true owner at the time of the execution of the Bill of Sale; but this does not apply to crops growing at the time of execution of the mortgage, nor to fixtures, plant, or trade machinery substituted for those specifically described.

The mortgage is absolutely void (a) unless the consideration is truly stated, (B) if it be given for a sum under £30, (y) unless the execution by the grantor is attested by one or more credible witnesses not being parties, (8) unless it is registered under the Act of 1878 within seven clear days after execution (c), (e) in cases where it is security for payment of money by the grantor, unless it is made in accordance with the form given in the schedule to the Act of 1882. (See M. L. P. P. 102.)

A Bill of Sale not for value, made by a person in insolvent circumstances at the time of making it, will be void against creditors under 13 Eliz. c. 5. (See ante, p. 72.)

Although no delivery of the

goods comprised in a Bill of

Sale is necessary for the purpose of changing the ownership

(b) See the discussion of the law as to Bills of Sale by way of mortgage in M. L. P. P. ch. vii. p. 93; 2 K. & E. 146, note; 36

Sol. J. 740, 751.

(c) The registration must be renewed once at least every five years, or it will become void.