Part II. OF THE SUBJECT-MATTER OF MORTGAGES. CHAPTER X. OF A MORTGAGE OF FREEHOLDS. SECTION I. FORMS OF MORTGAGES OF FREEHOLDS FORMERLY IN USE. ance. In early times, the form of a mortgage of freeholds was simple. Conveyance It consisted of a feoffment, with a condition contained in the with defeassame deed, or sometimes in a separate deed of defeasance (executed at the same time), to be void on payment of a given sum, at a given time. On performance of the condition, the mortgagor was restored to his old estate, paramount to all the charges and incumbrances of the feoffee (a). The objections to a mortgage by way of absolute conveyance, with the clause of redemption in a separate deed of defeasance, were that the defeasance might be lost, and then an absolute conveyance would be set up; or that the estate might be conveyed to a bona fide purchaser without notice, in which case the right to redeem would be wholly defeated, and the mortgagor be left to his remedy against the mortgagee for the fraud. In consequence of the discouragement it received (b), this mode of mortgage has become almost obsolete. sub-demise. In some instances the mortgage was effected by a demise and Demise and sub-demise; that is, the mortgagor demised the lands to the mortgagee for a long term of years at a peppercorn rent, and then the mortgagee re-demised them at a pecuniary rent, which covered the interest of the money lent, and there was a condition in the original demise that, on payment of the mortgage debt (a) See ante, p. 4. (b) See Cotterell v. Purchase, Cas. t. VOL. I.-C. Talb. (Williams) 61; Baker v. Wind, Chap. X. § 1. Conveyance in trust. Warrant of attorney. Mortgage of freeholds for a term of years. Form of mortgage for a term. and interest by a given day, the original term should be at an In some cases the lands were conveyed to a trustee in fee, with a proviso authorizing him to distrain on the lands in the mortgagor's possession, in case the interest shall be in arrear for a given time, with a further declaration appointing the trustee receiver during the time the lands shall be in lease. Or sometimes the mortgagor gave a power of attorney to confess judgment in ejectment in case the interest shall be in arrear, with a covenant to appoint such person a receiver as the mortgagee shall name, in case the lands shall be let. Mortgages of freeholds were formerly often, and are still occasionally, effected by demise for a long term of years, attended with a condition in the same deed, that, if the principal and interest be paid within a given time, the lands shall be reconveyed; or that the deeds of mortgage shall be void, or that the term shall cease and determine. If the mortgage be by term of years, a covenant is usually inserted on the part of the mortgagor, that, after default made, he or his heirs will, at his own cost, do all lawful acts for confirming the term, or, if required, for conveying the reversion in fee to such persons as the mortgagee, his executors, administrators, or assigns shall direct; for otherwise, the mortgagee would, on foreclosure, obtain a chattel interest only, and not the fee. But if the term, having no rent incident to the reversion, was originally of not less than 300 years, of which not less than 200 years are unexpired, a mortgagee, having by foreclosure extinguished the right of redemption affecting the term in favour of the mortgagor, may, by deed, enlarge the term, and so acquire the land in fee simple (c); and it would seem that a mortgagee by assignment, if in possession, could, even before foreclosure, enlarge the term, though he would clearly have no such right if the mortgage were by demise (d). A benefit which formerly resulted from the mortgage being, in the first instance, for a term of years, and not in fee, was that the security and debt devolved together; but, if the mortgage was in fee, the land descended to the heir as a trustee for the executor, and the debt vested in the executor, which, in case of the infancy or absence of the heir, created inconvenience (e). This inconvenience was remedied by a late Act (ƒ), which enabled the personal representative of a mortgagee, on being paid, to reconvey the legal fee. This enactment has been repealed by the Conveyancing Act, 1881 (g). In cases of deaths after the commencement of the last-mentioned Act, by s. 30 of that Act, an estate or interest of inheritance, or limited to the heir as special occupant, in any hereditaments vested in a sole mortgagee, devolves on his personal representative. Chap. X. § 1. for terms now A disadvantage of a mortgage for a term is, that the mort- Mortgages gagee, unless by special stipulation, is not entitled to the custody unusual. of the title deeds (h). In modern practice, mortgages for a term are almost universally abandoned, except where it is desired to raise money on the security of an estate tail without barring the entail further than is necessary for the purpose of giving effect to the security (i), as in the case of a lunatic tenant in tail (k); and also except in the case of trustees of settlements, in whom long terms of years are vested in trust to raise money for portions and other purposes. SECTION II. FORM OF MORTGAGE OF FREEHOLDS ACCORDING TO MODERN PRACTICE. mortgage i.-General Scheme of Arrangement of a Mortgage Deed.-In Form of modern practice, mortgages of freeholds are usually made either in fee. in fee or for such other freehold interest as the mortgagor has in the lands. A legal mortgage of freehold land in fee simple may be regarded as furnishing the normal type of a mortgage security. (e) See per Lord Redesdale in Schoole and Wife v. Sall, 1 Sch. & L. 176. (f) 37 & 38 Vict. c. 78, s. 4. (g) 44 & 45 Vict. c. 41. (h) Wiseman v. Westland, 1 Y. & J. 117. (i) See Fines and Recoveries Act (3 & 4 Will. IV. c. 74), s. 21; Carson, R. P. Stat. p. 282. (k) Re Pares, 2 Ch. D. 61, C. A. Chap. X. § 2 (i). Arrangement of clauses in mortgage deed. Who should be parties. Mistake in name. It is therefore proposed in this place to consider in detail the form and contents of such a mortgage, and to point out later, as occasion shall arise, such variations as are necessary or convenient in making mortgages of different kinds of property other than freeholds. The present practice with regard to the arrangement of clauses in mortgage deeds is usually as follows:-After the names and descriptions of the parties and the recitals, if any, follows the first witnessing part, containing a covenant for the payment of the principal debt and interest (1). This is succeeded by one or more further witnessing parts conveying the property by way of mortgage, subject to a proviso for redemption. Then follow any special clauses relating to the payment of the principal or interest. Next come special clauses relating to the subjectmatter of the mortgage, such as restrictions on the mortgagor's power of leasing, and covenants by him for the maintenance or insurance of the mortgaged property. These may be followed by clauses modifying or extending the statutory powers of sale (m) and other clauses giving special remedies to the mortgagee. Till recently, covenants for title were generally inserted at the end of mortgages, but these are now usually dispensed with in reliance upon the statutory covenants implied by the mortgagor being expressed to convey as "beneficial owner" or as "trustee, as the case may be. ii.-The Parties.-All persons who are intended to convey or to take anything under the mortgage deed, or to enter into stipulations in the deed, must be made parties. These parties will usually be the mortgagor of the one part, and the mortgagee of the other part. But sometimes the concurrence of other parties will be necessary for purposes of suretyship, or of signifying consent to the mortgage, or acknowledging receipt of the mortgage moneys, or for other purposes. Where the Christian name of one of the mortgagees was wrongly given in the parties, and the wrong name was subsequently erased, and the right name substituted, it was held that the alteration was not a material one so as to avoid the deed (n). (1) See ante, p. 9. (m) As to the powers of sale given to mortgagees by statute, see post, Chap. XLV. (n) Re Howgate and Osborn's Contract, (1902) 1 Ch. 451. iii.-The Recitals.-Recitals are frequently unnecessary in a Chap. X. mortgage deed, and may accordingly be dispensed with. They § 2 (iii). are, however, sometimes necessary or convenient for the purpose When recitals of explaining the nature and incidents of the subject-matter of are advisable. the security, or other matter affecting the form and contents of the deed. A recital of the mortgagor's seisin in fee, free from incumbrances, may be of use so as to render the deed, on the expiration of twenty years from its execution, a satisfactory root of title (o). But if earlier deeds are recited as proving the mortgagor's title, it must be borne in mind that such recitals prove only so much of the earlier deeds as are actually stated in the recital (p). recital. Recitals to be binding by estoppel must be clear and pre- Estoppel by cise (g); and will bind only those who are parties to the deed and persons claiming under them, and will not affect the rights of third parties (r). And a fraudulent misstatement in the deed, though it will bind the mortgagor himself (s), may be held not to bind a party claiming through him who would be aggrieved by the fraud (t). A party to a deed of conveyance is not estopped by recitals contained in other deeds through which the title to the property is derived (u). Where a recital contains a misstatement which was owing to a mistake of both parties to the deed, no estoppel arises (x). A recital will not be available by way of estoppel in any action or proceeding except such as are directly concerned with the deed containing the recital (y). Nor will estoppel be worked by a recital containing statements extraneous to the actual contract (z). (0) Bolton v. London School Board, 7 Ch. D. 766. But see Re Johnson and Tustin, 30 Ch. D. 42. (p) Gillett v. Abbott, 7 A. & E. 783. (q) Onward Bldg. Soc. v. Smithson, (1893) 1 Ch. 1, C. A.; Williams v. Pinckney, 67 L. J. Ch. 34, C. A. (r) Stroughill v. Buck, 14 Q. B. 781. See Beckett v. Bradley, 7 My. & Cr. 994; Whitton v. Peacock, 2 Bing. N. C. 411; Gaunt v. Wainman, 3 Bing. N. C. 69; Doe d. Marchant v. Errington, 6 Bing. N. C. 79; Pitt v. Williams, 5 A. & E. 885. (s) Doe d. Roberts v. Roberts, 2 B. & Ald. 367. (t) Doe d. Williams v. Lloyd, 5 Bing. N. C. 742. (u) Doe d. Shelton v. Shelton, 3 A. & E. 265. Eq. (x) Re Carter's Trusts, L. R. 3 Eq. (z) Kipp v. Wiggett, 10 C. B. 354; |