were disputed, at an undervalue, were allowed only the amount paid with interest (b). CHAP. XLII. A surety compounding the debt for a smaller sum, cannot, as Surety. against the principal debtor, stand as a creditor for the full amount (c). termination A trustee or other person standing in a fiduciary position will Purchase after not be allowed the benefit of his purchase as against his cestuis of fiduciary que trust or principal after he has ceased to fill any of the above position. characters, unless after full communication made by him of all the information he gained while he filled such character, and with the full knowledge and consent of his cestuis que trust or principal (d). The rule is not applicable to a trustee or agent, where the Consent of debtor acquiesces (e). If the cestuis que trust for a long time refuse to adopt the purchase, the trustee may keep it (ƒ). cestuis que trust. As to purchasers of incumbrances at an undervalue by persons Cases where trustees, &c. in a fiduciary position, if the mortgage is purchased for the may have full purpose of protecting a subsequent incumbrance to which they benefit of are entitled in their own right, they may take the full benefit of the prior security (g). The heir was allowed the full benefit of his purchase against an incumbrancer, a solicitor, who advised the purchase as a provision for the heir (h). So the devisee of the reversion, being also second incumbrancer, was allowed the full benefit (g). In bankruptcy the purchaser is entitled to a dividend on the full amount (i). security. of transfer of According to the usual practice, a transfer of a mortgage Form of deed consists of an absolute assignment of the debt, and the benefit mortgage. of all securities for the same, and of a conveyance of the mortgaged property with the powers and subject to the equity of redemption subsisting by virtue of the original mortgage. attorney now At law, the debt being a chose in action, was not, in general, Power of before the Judicature Act, 1873, assignable. A power of not necessary. attorney must therefore have been given by the mortgagee to the assignee to enable him to proceed in the mortgagee's name (b) Re Imperial Land Co. of Marseilles, 4 Ch. D. 566, C. A. (c) Reed v. Norris, 2 My. & Cr. 361. (d) Carter v. Palmer, 8 Cl. & F. 657. And see 3 Sug. V. & P. 11th ed. p. 895. (e) Crompton v. Huber, 1 Jur. N. S. 465. (f) Barwell v. Barwell, 34 Beav. (g) Davis v. Barrett, 14 Beav. 542. (i) Wilkinson v. Slee, 12 W. R. 848. CHAP. XLII. Benefit of securities pass on the covenant. But now such a power is no longer necessary, as assignees of legal choses in action are by that Act (k) empowered to sue in their own names, and to give good discharges without the concurrence of their assignors, provided the debtor or other person liable has notice of the assignment (1). If the deed of transfer refer in terms to the mortgage, the by assignment assignment of the debt will pass the benefit of the securities, though not expressly mentioned (m). of debt. Arrears of interest. Conveyance of mortgaged property. Arrears of rent do not pass. Debt passes by conveyance. Transfer of If, upon the transfer of a mortgage, the transferee pays to the transferor arrears of interest as well as the amount of the principal, such arrears will be recoverable by the transferee from the mortgagor, though not expressly mentioned in the assignment (n). The form of conveyance in a deed of transfer and the rights of the transferee thereunder will depend upon the nature of the property conveyed. A conveyance of land by way of transfer of mortgage, without express words as to rents in arrear, will not pass to the transferee arrears of rent accrued prior to the transfer (o). The conveyance of the estate will of itself pass the debt to the transferee, though there be no express assignment of the debt; for the estate being absolute at law, the debtor has no means of redeeming it but by paying the money; therefore, he who has the estate has in effect the debt, as the estate can never be taken from him, except by payment of the debt (p). In the case of a transfer of mortgage of copyholds, so long as the transaction between the mortgagor and mortgagee rests in covenant, if the mortgagee assign his equitable interest by deed, and the mortgagor surrender to the assignee, the latter may compel the lord by mandamus to admit him without a double fine (q). The reader will observe that Mr. Watkins, in his Treatise on Copyholds (r), refers to this case as an authority that if a surrenderee before admittance assign by deed, the lord must admit the assignee without a double fine; but it will be seen the case applies to an assignment by a covenantee only, and not by a surrenderee. (k) 36 & 37 Vict. c. 66, s. 25 (6). (m) Exp. Smith, 2 D. & L. 271. (0) Salmon v. Dean, 3 Mac. & G. (p) Jones v. Gibbon, 9 Ves. 407, 411. (a) Rex v. Lord of the Manor of Hendon, 2 T. R. 484. See 1 Scriv. Cop., 4th ed. p. 211. (r) 1 Watk. Cop., 4th ed. p. 128. Where a mortgage of copyholds has been effected in the usual way by conditional surrender, the transfer of the estate (if required) must be effected, either by means of an entry of satisfaction of the original mortgage immediately followed by a fresh conditional surrender by the mortgagor to the use of the transferee, or by the mortgagee being admitted and surrendering to the use of the transferee, subject to the equity of redemption of the mortgagor (s). CHAP. XLII. It is usual and advisable that the conveyance of the mortgaged Power of sale. property should expressly refer to and include the express or statutory power of sale contained in or implied by virtue of the mortgage (f); but it would seem that all powers and remedies, though not mentioned, would pass (u). gage debt. There is an obvious difficulty in effecting a transfer of part of Partial transa mortgage debt, as the mortgagee's remedies by sale, foreclosure, fer of mort&c. are indivisible, so as not to admit of a partial transfer; but such an arrangement may be carried out in effect either by the mortgagee retaining his estate in and powers and remedies over the mortgaged property, or by a transfer of the debt and property to a trustee for the original mortgagee and the party paying the amount; in either case the mortgagee or the trustee, as the case may be, will execute a declaration of trust that he holds the mortgage money and interest, and the securities for the same, upon trust for the mortgagee and the third party according to the amounts to which they are entitled respectively; the declaration should state whether the amounts are to rank pari passu, or whether one is to be paid in full in priority to the other (x). for redemp tion. It is generally considered that the introduction of a new New proviso proviso of redemption in the assignment of a mortgage is not sufficient to constitute a new mortgage. In one case, however, where the mortgagee assigned a part of the mortgage debt, and joined with the heir of the mortgagor in conveying part of the mortgaged lands to a new mortgagee, with a new proviso and at a new rate of interest, and with a bond and covenant, the Master of the Rolls held that it constituted a new mortgage (y). A voluntary deed of assignment by a mortgagee of all his Voluntary assignment debts and personal estate, with a grant generally of all the estates of mortgages. (8) 2 Dav. Conv., vol. ii. pt. 2, p. 793. (t) Curling v. Shuttleworth, 6 Bing. 121; Young v. Roberts, 15 Beav. 558. (u) Boyd v. Petrie, L. R. 7 Ch. A. 385. (x) Dav. Conv., vol. ii. pt. 2, p. 808; Key & Elph., vol. ii. p. 247. (y) Barham v. Earl of Thanet, 3 My. & K. 607. CHAP. XLII. Forms of statutory transfer of mortgage. held by him by way of mortgage, but not specifying the particular lands, and without delivery of the mortgage deed, or notice to the mortgagor, will not be aided in equity, if the deed be inoperative at law, though there be a covenant for further assurance (2). But at law, a general assignment by A. of all his personal estate and effects to trustees, has been held to pass a mortgage of leaseholds (a). By the Conveyancing and Law of Property Act, 1881 (b), it is enacted Sect. 27. "(1.) A transfer of a statutory mortgage may be made by a deed expressed to be made by way of statutory transfer of mortgage, being in such one of the three forms (A.) and (B.) and (C.) given in Part II. of the Third Schedule to the Act as may be appropriate to the case, with such variations and additions, if any, as circumstances may require, and the provisions of this section shall apply thereto. 66 (2.) In whichever of those three forms the deed of transfer is made, it shall have effect as follows (namely): "(i.) There shall become vested in the person to whom the benefit of the mortgage is expressed to be transferred, who, with his executors, administrators, and assigns, is hereafter in this section designated the transferee, the right to demand, sue for, recover, and give receipts for the mortgage money, or the unpaid part thereof, and the interest then due, if any, and thenceforth to become due thereon, and the benefit of all securities for the same, and the benefit of and the right to sue on all covenants with the mortgagee, and the right to exercise all powers of the mortgagee: "(ii.) All the estate and interest, subject to redemption, of the mortgagee in the mortgaged land shall vest in the transferee, subject to redemption. "(3.) If the deed of transfer is made in the form (B.), there shall also be deemed to be included, and there shall by virtue of the Act be implied therein, a covenant with the transferee by the person expressed to join therein as covenantor to the effect following (namely): "That the covenantor will, on the next of the days by the mortgage deed fixed for payment of interest, pay to the transferee the stated mortgage money, or so much thereof as then remains unpaid, with interest thereon, or on the unpaid part thereof, in the meantime, at the rate stated in the mortgage deed; and will thereafter, as long as the mortgage money, or any part thereof, remains unpaid, pay to the transferee interest on that sum, or the unpaid part thereof, at the same rate, on the successive days by the mortgage deed fixed for payment of interest. "(4.) If the deed of transfer is made in the form (C.), it shall, by virtue of this Act, operate not only as a statutory transfer of mortgage, but also as a statutory mortgage, and the provisions of (z) Ward v. Audland, 8 Beav. 201. But see now stat. 56 & 57 Vict. c. 21, set out ante, p. 602. (a) West v. Stewart, 14 M. & W. 47. (b) 44 & 45 Vict. c. 41. this section shall have effect in relation thereto accordingly; but it shall not be liable to any increased stamp duty by reason only of it being designated a mortgage." CHAP. XLII. several By sect. 28, in a statutory transfer of mortgage the implied Joint and covenants of several joint transferors will be deemed to be joint covenants. and several; and if there are several transferees the benefit of such covenants will enure to them jointly, as in the case of a statutory mortgage (c). transfer of The transfer of mortgages on a change of trustees has been Form of simplified. If the mortgaged property was freehold, it was for- mortgage merly conveyed to a releasee to the use of the continuing and a to trustees. new trustee. If the mortgage was of personalty, two deeds were formerly necessary; but this necessity has been removed by Lord St. Leonards' Act (d), which enacts that any person shall have power to assign personal property now by law assignable, including chattels real, directly to himself and another person or other persons, or corporation, by the like means as he might assign the same to another. This enactment does not apply to choses in action, but now choses in action, as well as freeholds, may be conveyed by a person to himself jointly with another person by the like means by which they might have been conveyed by him to another person (e). A transfer of a security by a deposit of deeds may be effected Transfer of security by by a simple delivery of the deeds to the transferee without deposit of any memorandum. Where a solicitor paid off a debt of deeds. his client which was secured by deposit of deeds, and took possession of and retained the deeds, it was held that he took them as transferee of the security so as to exclude his lien for costs (f). An equitable mortgagee by deposit of deeds cannot pass his interest in the mortgaged property by a parol voluntary gift accompanied by a delivery of the deeds, and the donee has, in such case, no right to retain the deeds (g). Invalid transfer by gift. The costs of a transfer of mortgage are generally payable Costs of by the mortgagee (h), unless the mortgage is called in, and transfer. (e) See this section set out ante, Pp. 146, 147. (d) 22 & 23 Vict. c. 35, s. 21. (e) 44 & 45 Vict. c. 41, s. 50. See further as to transfers of mortgages on a change of trustees, ante, p. 535. (f) Vaughan v. Vandersteyen, An nesley's Case, 2 Drew. 409. See Mat- (g) Re Richardson, Shillito v. Hobson, (h) Re Radcliffe, 22 Beav. 201. |