CH. 2, s. 2. the Court will not hold that he was bound to examine the PT. II. T. 10, deeds. And if he does not, and they do not show any title in the mortgagor, yet such equitable mortgagee is entitled to priority, even over a second equitable mortgagee, without notice, who has deeds which show a complete title in the mortgagor, and has a memorandum of deposit (a). This is only defensible on the ground of public convenience, in facilitating loans by means of equitable mortgages. It illustrates the great danger of lending on such securities. 1120. An equitable mortgagee by deposit of title deeds will Priority. have preference over a subsequent purchaser or mortgagee of the legal estate with notice, but not over a subsequent purchaser or mortgagee, who has the legal estate, and had no notice of such equitable mortgage (b). 1121. An equitable deposit, with memorandum of charge, by a devisee, is an alienation which pro tanto prevents a creditor of the testator from subsequently obtaining a charge on the estate, as assets under the stat. 3 & 4 Will. 4, c. 104 (c). 1122. An equitable incumbrancer on property, who has distinct notice of a prior incumbrance, cannot, by concealing his knowledge from his assignee, give such assignee a better right than that which he himself possesses (d). 1123. Where a trustee of funds invested on mortgage in his own name deposits the deeds without notice of the trust, to secure an advance to himself, the cestuis que trust are entitled to priority over the equitable mortgagee, and to delivery up of the deeds (e). 1124. An equitable mortgagee by deposit is a purchaser within the stat. of 27 Eliz. c. 4, so as to avoid a prior voluntary settlement in equity, though not at law. So he may avoid (a) Dixon v. Muckleston, L. R. 8 Ch. Ap. 155. (b) Coote Mortg., 3rd ed. 170. Co. v. Smart, L. R. 10 Ch. Ap. 567. (d) Ford v. White, 16 Beav. 125. (e) Newton v. Newton, L. R. 6 Eq. 135. PT. II. T. 10, such a settlement as a creditor under the 13 Eliz. c. 5, if CH. 2, s. 2. Fixtures. Interest. he was a creditor at the time of the settlement (a). 1125. Under an equitable mortgage of a lease, even by a mere deposit without any memorandum, the tenant's fixtures will be included (b). 1126. Where a simple contract debt has been secured by a deposit of deeds, unaccompanied by any stipulation as to interest, or any memorandum from which an exclusion of interest can be inferred, the mortgagee is entitled to interest at the rate of 4 per cent., on the principle that a deposit of deeds to secure a loan is to be considered as an agreement to execute a mortgage of the property comprised in the deeds, with interest (c). 1127. Pr. 11. T. 10, 1. A mortgage and a pledge dis tinguished from each other. Stock. Nondelivery of possession. SECTION III. Of Mortgages of Personal Property. I. A mortgage of personal property is a transfer of the ownership itself, subject to be defeated by the performano of the condition within a certain time. But a pledge on passes the possession, or at most a special property to the pledgee, with a right of retainer till the debt is paid or tl engagement is fulfilled (d). 1128. Public stock may become the subject of loan, or it may be of itself the security for the repayment of money (€). And a contract for the transfer of stock is good, though the transferor is not possessed of it at the time (). 1129. If the assignor retains possession of chattels comprised in an assignment, or bill of sale, as it is technically termed, this is primâ facie a badge of fraud, as against creditors. (a) Coote Mortg., 3rd ed. 170. (d) Story's Eq. Jur. § 1030:2 Spence's Eq. Jur. 771. (e) Coote Mortg., 3rd ed. 274. (f) Id. 276. CH. 2, s. 3. But it does not render the transaction fraudulent and void, P. II. T. 10, where it is consistent with the deed; or where the deed is given to secure the repayment of a debt by instalments, and the deed provides, that, "until default shall be made in payment of all or any of the said sums," the assignor may retain possession (a). 1130. Where the first of two mortgages of personal estate is Priority. paid off, and the person who pays it off takes an assignment of such personal estate to secure the repayment of the money advanced by him in paying off the debt to the original creditor, but does not take an assignment of the debt and security, he will not stand in the place of the original creditor as regards priority, because the original security is not kept on foot (b). 1131. II. A mortgage or pledge of personal property may be II. Tacking. held till a subsequent debt or advance, without notice of a mesne incumbrance, is paid, as well as the original debt (except so far as bankruptcy may alter the case), on the ground that the mortgagee or pledgee would not have lent the further sum except on the credit of the mortgage or pledge, and that he who seeks equity must do equity. This presumption may, indeed, be rebutted by circumstances; but unless it is rebutted, it will generally prevail in favour of the lien, against the pledgor himself, although not against his creditors having a specific lien or interest in the property, or against subsequent purchasers of the equity of redemption (c). 1132. security. A mortgagee, whose security exceeds the debt secured, Application may apply the balance in payment of any unsecured debt motgage due to him from the mortgagor, as against the mortgagor's executors (d). 1133. (a) Martindale v. Booth, 3 B. & Adol. 498. (b) Medley v. Horton, 14 Sim. 222. As to the effect of notice, or want of notice, as regards priority, see infra, Part III. Tit. 12, Ch. 2, s. 11. (d) In re Haselfoot's Estate, L. R. PT. II. T. 10, III. A mortgagor of personal property may redeem, if he proceeds within a reasonable time. But, on the gagor's right other hand, the mortgagee may either sell the property III. Mort to redeem, and mort to sell. gagee's right on due notice, though no power of sale may have been given him, or he may foreclose (a). The reason would appear to be, that other things of the same kind, and of the very same worth, even to the party himself, may be purchased for the sum which the articles in question fetch. 1134. IV. Indem nity. V. Mortgage of a ship. IV. If a person transfers his shares in a company by way of mortgage, and the mortgagee, as registered owner, becomes liable for calls or other payments, he cannot compel his mortgagor to indemnify him, unless he comes to redeem (b). 1135. V. A mortgage or transfer of a mortgage of a British ship or any share in her must be in a specified form, under seal, and attested, and registered; and the date and hour of its entry must be indorsed upon it. 1136. In case more than one mortgage of the same ship or share is registered, the mortgagees, notwithstanding any notice, have priority according to the date of registration. Every registered mortgagee may dispose of the ship or share mortgaged; but no subsequent mortgagee may do this, without the concurrence of every prior registered mortgagee, except under the order of some competent Court (c). 1137. By a first mortgage of a ship, even before registration, the mortgagee acquires the legal ownership of it, and has a right to take possession. And under s. 69 of the 17 & 18 Vict. c. 104, the only effect of the omission to re (a) Story's Eq. Jur. § 1031; 2 Spence's Eq. Jur. 637; Coote Mortg., 3rd ed. 279, 500; [but in Carter v. Wake, L. R. 4 Ch. D. 605, Sir G. Jessel, M. R., held that the pledgee of personal chattels has no right to foreclose.] (b) 2 Spence's Eq. Jur. 774. (c) Sm. Merc. Law, 9th ed. 187; Mau. & Pol. 33-5; 17 & 18 Vict. c. 104, ss. 66, 69, 71. CH. 2, s. gister a mortgage is to postpone it to a subsequent P. 3. mortgage or transfer which is registered before such first mortgage. As regards other parties, the unregistered prior mortgagee is complete owner, though of course subject to redemption. Subsequent mortgagees will only acquire the interest left to the mortgagor, or, in other words, his right to redeem. And the first mortgagee will have the right to the freight earned by the ship, as against equitable assignee of the cargo, without notice of the first mortgagee's title (a). 1138. A certificate of mortgage may be granted by the registrar to the owners of a ship, allowing a mortgage out of the country where the ship is registered. And the mortgage, when made, is to be indorsed, by a registrar or British consular officer, on the certificate of mortgage (b). 1139. Prior to the stat. 25 & 26 Vict. c. 63, s. 3, an equitable mortgage was invalid (e), but by that enactment, "equities may be enforced against owners and mortgagees of ships, in respect of their interest therein, in the same manner as equities may be enforced against them in respect of any other personal property." 1140. The mortgagee of a ship is entitled to the accruing freight from the time he takes possession (d). A security valid in equity may be given upon freight to be earned or a cargo to be acquired (e). 1141. The first registered mortgagee of a ship, by taking possession of her before the freight is completely earned, obtains a legal right to receive the freight, and to retain thereout not only what is due on his first mortgage, but also the amount of any subsequent charge which he may have acquired on the freight, in priority to every equitable (a) Keith v. Burrows, L. R. 1 C. P. D. 722; 2 Ap. Cas. 636. (b) Sm. Merc. Law, 9th ed. 189; Mau. & Pol. 36; 17 & 18 Vict. c. 104, ss. 76-80. (c) Liverpool Borough Bank v. |