FOR A MORTGAGE.

on the same.

Further wit

nesseth covenant to mort

gage lands in schedule.

principal sum of £4,000, or any part thereof, shall remain due or owing, pay, or cause to be paid, to the said C. D., -and interest his executors, administrators, or assigns, interest for the said sum of £4,000, or for so much thereof as, for the time being, shall remain unpaid, after the rate aforesaid, by equal half-yearly payments, on the 6th day of December and the 6th day of June in every year (b): AND THIS INDENTURE FURTHER WITNESSETH, that, in further performance of the said agreement, and in consideration of the premises, he the said A. B. doth hereby for himself, his heirs, executors, administrators, and assigns, covenant with the said C. D., his executors, administrators, and assigns, that he the said A. B., his heirs or assigns, and all other necessary parties, (if any), shall and will, at any time hereafter, so long as the said sum of £4,000, or any part thereof, shall remain due or owing on this present security, upon the request of the said C. D., his executors, administrators, or assigns, and by such conveyances and assurances in the law as the said C. D., his executors, administrators, or assigns, or his or their counsel in the law shall reasonably advise or require, but at the costs and charges of the said A. B., his heirs, executors, administrators, or assigns, well and effectually convey and assure all and singular the messuages, lands, tenements, and hereditaments, [the particulars whereof (c)] are mentioned in the schedule to these presents with their and every of their rights, members,

Mortgage by deposit of title deeds.

(b) As it is generally intended, that the money advanced shall remain due on the security of the mortgage after the day named in the covenant for payment of the principal, this additional covenant is always now inserted, in order to enable the mortgagee to recover his interest by a separate action on the covenant, without being obliged to sue for the principal, when he wants only the interest.

(c) It is often necessary and desirable to make an equitable mortgage by a deposit of the title deeds of the property, and the precedent in the text may be adapted to accompany such a deposit, by omitting the words in brackets, and inserting in their place

66

comprised in the several deeds and muniments of title which"

or such other words referring to the title deeds as may suit the case. An equitable mortgage may be made by the mere deposit of the

easements, and appurtenances, unto and to the use of the said C. D., or his executors, administrators, or assigns, and

deeds, without any written agreement; for the deposit is considered, in equity, as evidence of an agreement for a mortgage, which will entitle the party claiming the benefit of the agreement to all such rights as he would have been entitled to had the contract been completed. (Russel v. Russel, 1 Bro. C. C. 269; Featherstone v. Fenwick, Ib. note; Harford v. Carpenter, Ib. note; Birch v. Ellames, 2 Anst. 428; Ex parte Wright, 19 Ves. 255; Parker v. Housefield, 2 Myl. & Kee. 419). And the mere deposit is sufficient, without a word passing between the parties. (Ex parte Langston, 17 Ves. 227, 230; Ex parte Kensington, 2 Ves. & Bea. 79). The deposit, too, will operate as a security for further advances, as well as for monies due at the time, if there be any reasonable evidence that the advances were made on security of the deposit. (Ex parte Langston, ubi supra; Ex parte Whitbread, 19 Ves. 209).

It was formerly held, that the deposit would not act as a security, if the deeds were delivered for the purpose of enabling a legal mortgage to be prepared. (Norris v. Wilkinson, 12 Ves. 192; Ex parte Bulteel, 2 Cox, 243; Ex parte Pearce, Buck, 525). But the contrary seems now to be settled law. (Edge v. Worthington, 1 Cox, 211; Ex parte Bruce, 1 Rose, 374; Hockley v. Bantock, 1 Russ. 141; Keys v. Williams, 3 You. & Col. 55).

It is not necessary that all the title deeds of the estate to be charged should be deposited: a deposit of part is sufficient, unless there be evidence of intention that there should be no security till the whole were deposited. (Ex parte Wetherell, 11 Ves. 398; Ex parte Chippendale, 1 Deac. 67; S. C. 2 Mon. & Ayr. 299; Ex parte Pearce, Buck, 525). With respect to copyholds, some doubts seem to have been entertained; but it is now decided, that an equitable mortgage, of property held by copy of court roll, may be made by a deposit of the copies. (Ex parte Warner, 19 Ves. 302; Whitbread v. Jordan, 1 You. & Coll. 303; Winter v. Lord Anson, 3 Russ. 492; Lewis v. John, 1 C. P. Cooper, 8).

FOR A MORTGAGE.

-not advis

It is to be observed, however, that the practice of taking mortgages by mere deposit of the muniments of title, without any state- able. ment in writing, is strongly to be reprobated. The courts have frequently expressed their disapprobation of the practice; (Ex parte Haigh, 11 Ves. 403; Ex parte Whitbread, 19 Ves. 211; Ex parte Hooper, 1 Mer. 7); and it exposes the mortgagee to the risk of losing his security, by the production of parol evidence, to shew that the deposit was not intended as a security at all, or only as a security to a limited amount. (Ex parte Whitbread, 19 Ves. 209; Ex parte Langston, 17 Ves. 227; Ex parte Mountfort, 14 Ves. 606). Moreover, in the case of bankruptcy, the mortgagee will only be allowed

FOR A MORTGAGE.

Disadvantages of equitable mortgagees.

Their remedies.

his or their heirs, by way of mortgage, for further securing the repayment to the said C. D., his executors, admini

the costs of the petition for sale, when the deposit is accompanied by an agreement in writing. (Ex parte Brightwen, 1 Swanst. 3; S. C. Buck, 148; Anon. 2 Mad. 281; Ex parte Trew, 3 Mad. 172; Ex parte Warry, 19 Ves. 472; Ex parte Sykes, Buck, 349; Ex parte Reid, Mon. & M'Arth. 114; Ex parte Reynolds, 2 Mon. & Ayr. 104).

Unless as a temporary arrangement, equitable mortgages are not desirable: if made (as they always should be made), by deed, so as to have the benefit of a covenant for payment of the money, they are little less expensive than a legal mortgage; and if made by agreement, they must be stamped with the ad valorem stamp, before they can be made effectual. They afford much less security to the creditor than proper legal mortgages; because he will be postponed to legal mortgages, although subsequent, in point of date, to his own, unless he can shew that the subsequent incumbrancers had actual or constructive notice of his own security. (Birch v. Ellames, Anst. 427 ; Plumb v. Fluitt, Id. 432; Whitbread v. Jordan, 1 You. & Col. 303; Ex parte Hardy, 2 Deac. & Chit. 393). And registration is not notice. (Morecock v. Dickins, Amb. 678).

The remedies, too, of an equitable, are much less efficacious and speedy than those of a legal, mortgagee. For the equitable mortgagee is, of course, unable to bring ejectment, or to arm himself with a power of sale, to be used without the concurrence of the mortgagor. He can only render his security available through the medium of a court of equity; and if the mortgagor become bankrupt, an equitable mortgagee cannot avail himself of Lord Loughborough's order, but must make a special application to the court for a sale, (Archb. Bank. Law, 6th edit. 121, 122), and is only entitled to the rents and profits from the date of the order for sale. (Ex parte Bignold, 2 Mon. & Ayr. 16; see, too, Ex parte Living, 1 Deac. 1; S. C. 2 Mon. & Ayr. 223).

It seems, that an equitable mortgagee, proceeding by bill in equity, may pray to have the mortgaged estate sold, and his debt discharged out of the proceeds; (Pain v. Smith, 2 Myl. & Kee. 417; Smith v. Nelson, Seton's Forms of Decrees, p. 180; Meux v. Ferne, and Spring v. Allen, noticed 2 Myl. & Kee. 422; Mellor v. Wood, 1 Kee. 16; Brocklehurst v. Jessop, 7 Sim. 438); or he may pray that the mortgagor be ordered to pay the debt, and, in default of payment, to convey the premises to the mortgagee, discharged of all right of redemption; (Parker v. Housefield, 2 Myl. & Kee. 419; Newton v. Aldous, Lavender v. Roberts, Warren v. Barling, and Langdon v. Wilmot, cited 2 Myl. & Kee. 421, 422; see, too, Price v, Carver, 3 Myl. & Cra. 161); but, in both cases, the mortgagor is entitled to have six

strators, or assigns, of the said sum of £4,000, or such part thereof as shall for the time being remain unpaid, with in

months allowed him for payment of the money. (Parker v. Housefield, and Mellor v. Woods, ubi supra). If the mortgagor be dead, leaving an infant heir, and the decree is for a foreclosure, the infant is allowed a day to shew cause against the decree, on coming of age; but if the decree be for a sale, he is not allowed a day. (Scholefield v. Heafield, 7 Sim. 669; Price v. Carver, 3 Myl. & Cra. 157). Of course, of a mortgage made by a mere deposit of deeds, there can be no registry made, as there is no instrument to be registered; and the want of registration does not affect the validity of the mortgage. (Sumpter v. Cooper, 2 Barn. & Ad. 223).

FOR A
MORTGAGE.

An equitable mortgage, by a simple contract debtor, to the crown, Their right is binding on the crown. (Casberd v. Ward, 6 Price, 411; Pectore v. against partiPhilpott, 12 Price, 197; see the cases of The King v. Snow and The cular parties. King v. Benson, 1 Price, 220; and more fully, 6 Price, 465). An equitable mortgage by an accountant to the crown, to a person who knows that he is so, is not available against the crown: (Broughton v. Davis, 1 Price, 216): whether it is, in any case, available, appears undecided.

If an equitable mortgage is to be made to a person confidentially connected with the mortgagor, as his solicitor or his wife, a deposit of deeds will not avail as against third persons. (Bozon v. Williams, 3 You. & Jerv. 150; Ex parte Cuming, 9 Ves. 115). And, of course, a solicitor cannot take a deposit of deeds as a security for future costs. (Ex parte Laing, 2 Mon. & Ayr. 381).

It is to be observed, however, that the question, as to whether a deposit of deeds is available as an equitable mortgage, is independent of the question as to the lien which the holder of the deeds may have in them. He may have no right to call for a legal mortgage, and no interest whatever in the land to which the deeds relate, but may still have a lien on the deeds for the monies he has advanced. (Ex parte Whitbread, 19 Ves. 211; Ex parte Allison, 1 Glyn & Jameson, 210).

omnuled

88an 499

Great caution should be exercised as to taking a deposit of a lease Deposit of as a security; for, as the depositary is, in equity, an assignee of the leases. lease, and is entitled to call for an assignment, by way of mortgage, of the legal estate, a court of equity will compel him to take such assignment, and thereby render himself liable to the rent and covenants of the lease: (Lucas v. Comerford, 3 Bro. C. C. 166; S. C. 1 Ves. jun. 235; Flight v. Bentley, 7 Sim. 149): and the same law holds good in the case of the equitable assignee of an underlease, who is himself the original lessor. (Jenkins v. Portman, 1 Keen, 435). Hence, it is evident, that no mortgagee should ever take a lease, by way of deposit, unless it be clear that the lease is a beneficial one, or

508.

FOR A MORTGAGE.

terest for the same respectively, after the rate aforesaid; and that such mortgage shall and may be made with, under, and subject to all such covenants, conditions, provisoes, power of sale, and other clauses, as the counsel of the said C. D., his executors, administrators, or assigns, shall reasonably advise or require; AND the said A. B. doth right to convey. hereby for himself, his heirs, executors, administrators, or assigns, covenant with the said C. D., his executors and administrators, that he, the said A. B., now hath in himself

Covenant by mortgagor for

-of bonds, policies, &c.

Discrepancy between agreement and deposit actually made.

unless the deposit be accompanied by an agreement, negativing the liability of the depositary to take a legal assignment. The best form of such an agreement would be a stipulation for a mortgage, by way of underlease.

The depositary of a bond does not acquire a lien on it, as against the assignees of the obligee, unless notice of the deposit be given to the obligor. (Ex parte M'Turk, 2 Deac. 58). So, a valid equitable mortgage cannot be made of shares in a company, by a deposit of the certificates, or by an agreement, unless notice be given of the company. (Ex parte Spencer, 1 Deac. 468; Cumming v. Prescott, 2 You. & Coll. 488). But the manner of making the mortgage does not seem to be of much consequence, provided that notice is given to the company. (Ex parte Masterman, 2 Mon. & Ayr. 209; S. C. 4 Deac. & Chit. 751). And a mortgage of a policy of assurance is not good against the assignees of the mortgagor, unless notice be given to the assurance society. (Williams v. Thorp, 2 Sim. 257). What is a sufficient notice, in these cases, will be found discussed in Ex parte Waithman, 4 Deac. & Chit. 412; Ex parte Carlis, Id. 354; Ex parte Stright, Mont. 502; S. C. 2 Deac. & Chit. 314; and further information on the subject of the notice required to be given by purchasers and mortgagees of choses in actions and equitable interests, will be found in the note on that subject, in a subsequent division of this work.

Finally, however, with respect to mortgages by the deposit of documents, it should be observed, that if the deposit be accompanied by an agreement, specifying certain documents as intended to be deposited, or certain property as intended to be charged, the security will be available as to all, notwithstanding some of the documents, or the documents relating to some of the property, may not be actually deposited. (Ex parte Leathes, 3 Deac. & Chit. 112; Ex parte Edwards, 1 Deac. 611). And it is apprehended, that if the agreement specified certain documents, and more were actually deposited, the security would extend to all which were deposited, unless such a construction should be inconsistent with the tenor of the written agreement.