the receipt of the rents, the mortgage debt and interest might Chap. III. have been paid (1). In one case time was held to be no bar to redemption, although upwards of sixty years had elapsed since the mortgagee took possession (r). (ii.) How far the mortgagor is payment. iii.-Rights and Liabilities of Parties under Welsh Mortgages. -With regard to the personal liability of the mortgagor to personally repay the amount advanced, the effect would appear to be liable for different according to the form of the security adopted. In the case of a Welsh mortgage proper, it is conceived that an action of debt for the principal would lie as in the case of an ordinary mortgage (s); though not apparently in respect of interest, the receipt of the rents and profits being, by the terms of the contract, in lieu and satisfaction of interest. In a case (t) of an ordinary mortgage, without any covenant to pay the debt, Lord Chancellor Talbot was of opinion that every mortgage implies a loan, and that every loan implies a debt, and that though there were no covenant or bond, yet the personal estate of the borrower remained liable to pay off the mortgage, and his lordship said that this was so in the case of Welsh mortgages, where no day certain is appointed for payment, but the matter is left at large. Where the security is in the nature of a Welsh mortgage in the form whereby the rents and profits are to be taken by the mortgagee until all that is due to him for principal and interest is satisfied, all personal liability of the borrower appears to be necessarily excluded by the nature of the agreement between the parties. And where it was agreed in writing that, in consideration of an advance, the borrower should let certain land to the lender for six years, the borrower to get back his lands on repayment of the advance, but there was no express agreement by the borrower to repay the money lent, it was held that there was no personal liability on the borrower to do so, and that an action of debt brought by the representatives of the lender after the expiration of the term could not be sustained (u). A further point arises in respect of the mortgagee's liability Mortgagee's (q) Fenwick v. Reed, 1 Mer. 114. (r) Orde v. Heming, 1 Vern. 418. (s) See ante, p. 10. VOL. I.-C. (t) King v. King, 3 P. Wms. 361. 577. D liability to account. Chap. III. to account. This, again, would seem to depend upon the precise nature of the security in question. (iii.) Where rents lieu of interest. Where the mortgage is a Welsh mortgage properly so called, are taken in i.e., where by the terms of the mortgage contract it is agreed that the mortgagee shall take the rents and profits of the land in lieu of interest until the mortgagor thinks fit to redeem, it appears unreasonable to suppose that the Court would direct an account, and by so doing relieve the mortgagor of a bargain in its terms determinable at his own instance. Where rents taken are to be applied in reduction of principal. Determina tion of mortgage for term. Trustees may effect Welsh mortgage. It is true that in some cases (), where the accrual of rents and profits was equivalent to the payment of an excessive rate of interest, the Court has directed an account to be taken, and upon this it has been assumed that the Court would be willing to do so in every instance at the present day; it is to be observed, however, that the decisions referred to were all of them previous in date to the repeal of the usury laws (y), and it may be doubted whether they would now carry the weight attributed to them. Where, however, the mortgage is of a kind requiring the mortgagee to apply the rents and profits in reduction of the principal sum advanced and interest, whether it be of the fee or for a term of years, it would seem that a direction that an account be taken would be incident to an action for redemption by the mortgagor, just as in the case of an action against a mortgagee in possession under an ordinary mortgage (≈). Although in the case of a Welsh mortgage of the fee or for a long term of years, the security will invariably be terminated by redemption on the part of the mortgagor, a Welsh mortgage for a short term of years may determine by effluxion of time, in which case the liability of the mortgagee to account would apparently depend upon the intention of the parties as expressed or to be inferred from the terms of the contract. It has been decided in an Irish case that a trustee empowered to raise money by mortgage may effect a Welsh mortgage (a); such mortgages appear, however, to have been formerly very common in Ireland (b). (x) Fulthorpe v. Foster, 1 Vern. 477. See Alderson v. White, 2 De G. & J. 97; Longuet v. Scawen, 1 Ves. Sen. 403; Balfe v. Lord, 2 Dr. & War. 480. (y) 17 & 18 Vict. c. 90. (z) See Teulon v. Curtis, Yo. 619. (a) Gorman v. Byrne, 8 Ir. Com. L. 394. (b) See Hartpole v. Walsh, 5 Bro. P. C. 267, at p. 275. (iii.) Whether The continuing right of redemption incident to a Welsh Chap. III. mortgage would apparently be sufficient to prevent the power of sale given to mortgagees by sect. 19, sub-sect. (1) of the Conveyancing Act, 1881, from applying to such a security. statutory Having regard to the fact that the definition of "mortgage" in sale apply to sect. 2 of that Act includes a "charge," it would seem that such Welsh mortpowers and provisions of the Act relating to mortgages as are not inconsistent with the nature of Welsh mortgages will be applicable thereto. gages. CHAPTER IV. ANNUITY DEEDS AND RENTCHARGES. Grants of i. Nature and Incidents of the Security.-A form of security repurchaseable annuities for repayment of money advanced, which was formerly exten by way of security. Presumption in equity of right to redeem. Notice of intention to repurchase. Personal payment. sively used and is still adopted by some insurance societies, is that of a grant not of the estate itself, but of an annuity or rentcharge arising thereout, with a power of repurchasing the same on payment of a specified sum. The Courts of Equity were formerly strongly inclined to regard grants of annuities, where the power of repurchasing is given at the same time with the grant and as part of the same transaction, as being contracts not for absolute sale, but for securing a loan, and have therefore, as far as possible, disregarded any conditions as to time or mode of repayment, and treated the grants as liable to redemption in like manner as mortgages (a). A ground for this construction arises, when the deed contains a stipulation for notice to be given of the grantor's intention to repurchase, and for repayment of the original purchase-money, with all arrears of the annuity, and a half-year's payment in addition, so as to allow ample time to find out another hand to take the money, and to secure the interest in the meantime (b). The fact of there being an immediate remedy by covenant or covenant for otherwise against the person of the grantor, while there is no present remedy against the property (as in the ordinary power of distress and entry after default in payment for twenty-eight days), leads to an inference that the estate is only meant as a security (c). But, on the other hand, the express exemption of (a) Longuet v. Scawen, 1 Ves. Sen. 404; Floyer v. Sherard, Amb. 18. See Secretary of State for India v. British Empire Mutual Life Ass. Co., 67 L. T. 434, C. A. (b) Verner v. Winstanley, 2 Sch. & L. 293; Lawley v. Hooper, 3 Atk. 278. (c) Bulwer v. Astley, 1 Ph. 422; Kenney v. Lynch, 2 J. & L. 330. the grantor from all personal liability (which renders the case very similar to a Welsh mortgage) does not affect the right of redemption (d); though in some cases the absence of a covenant for payment has led the Court to treat the transaction as an absolute sale of the annuity, subject to a power of repurchase, the conditions of which must be strictly observed (e). In Bulwer v. Astley (ƒ), all the above circumstances occurred in favour of the right of redemption; and it may be observed that in all the above cases the right of repurchase was not limited to any particular time. In cases of this nature, the heir of the grantee, where the annuity is limited to the heirs, is a trustee for the executor (g). Chap. IV. (i.) nature of At the present time it would seem that the Court will not Evidence of treat a grant of an annuity with power to repurchase as a mere transaction. redeemable security for a debt or loan without clear proof that such was the nature of the transaction (h). Redeemable annuities are now seldom given except by tenants Form of for life, in which case the form of the annuity deed usually to secure annuity deeds consists of the grant of an annuity for a life or lives, or for a advances. term of years determinable upon a life or lives with a covenant by the grantor to pay the annuity. ii.-Remedies of Annuitants.-Formerly an annuity deed Powers of distress, &c. usually contained express powers of distress and entry upon the lands charged with the annuity, and a demise of the land to trustees for a term of years upon trusts to secure the annuity. When an annuity is secured in the usual way by a power of entry in the annuitant and a trust term in the trustee, the power of entry is not inconsistent, even at law, with the term, and if the grantor, under the provisions of the annuity deed, becomes tenant to the trustee of the term at a rent, the annuitant can, upon default made in payment of the annuity for the period specified, bring an action against the grantor under the power of entry; but ejectment will not lie by the trustee of the term, without notice to quit first given to the grantor. It would seem that the power of entry would not be exerciseable (d) Longuet v. Scawen, 1 Ves. Sen. 404; but see Williams v. Owen, 5 My. & Cr. 303. (e) Mellor v. Lees, 2 Atk. 494; Floyer v. Lavington, 1 P. Wms. 268. (f) 1 Ph. 422. (g) Longuet v. Scawen, 1 Ves. Sen. 404. (h) See Knox v. Turner, L. R. 5 Ch. 515; Preston v. Neele, 12 Ch. D. 760. |