Now, however, by the Building Societies Act, 1884 (≈), it is enacted as follows: CHAP. XXX. "The word 'disputes' in the Building Societies Acts [1874 to Definition of 1884], or in the rules of any society thereunder, shall be deemed to word "disrefer only to disputes between the society and a member, or any of 1884. putes" in Act representative of a member, in his capacity of a member of the society, unless by the rules for the time being it shall be otherwise expressly provided; and, in the absence of any such express provision, shall not apply to any dispute between any such society and any member thereof, or other person whatever, as to the construction or effect of any mortgage deed, or any contract contained in any document, other than the rules of the society, and shall not prevent any society, or any member thereof, or any person claiming through or under him, from obtaining in the ordinary course of law any remedy in respect of any such mortgage or other contract to which he or the society would otherwise be by law entitled." To bring a dispute within the arbitration clause, it must be one which arises between the trustees and a person whose claim to be a member of the society is not in dispute (a). vii.-Reconveyance.-By sect. 5 of the Benefit Building Statutory Societies Act, 1836 (b) (which is still in force, notwithstanding Act of 1836. receipt under the repeal of the Act, as regards societies formed under that Act and not having obtained a certificate of incorporation under the Building Societies Act, 1874 (c)), it was enacted that it should be lawful for the trustees named in any mortgage made on behalf of such societies, or the survivors or survivor of them, or for the trustees for the time being, to indorse upon any mortgage, or further charge, given by any member of such society to the trustees thereof for moneys advanced by such society to any member thereof, a receipt for all moneys intended to be secured by such mortgage or further charge, which should be sufficient to vacate the same, and vest the estate of and in the property comprised in such security in the person or persons for the time being entitled to the equity of redemption, without it being necessary for the trustees of any such society to give any reconveyance of the property so mortgaged; which receipt should be specified in a schedule to be annexed to the rules of such society duly certified and deposited as aforesaid (d). (2) 47 & 48 Vict. c. 41. (a) Prentice v. Loudon, L. R. 10 C. P. 679. (b) 6 & 7 Will. IV. c. 32. (c) 37 & 38 Vict. c. 42. A form of receipt is given in the Schedule to the Act. (d) See ante, p. 544. CHAP. XXX. Statutory receipt under Act of 1874. Similar language of both statutes. Effect of statutory receipt as to vesting the property. By sect. 42 of the Act of 1874 (by which all incorporated building societies are governed, whether formed under this Act or formed under the repealed Act, and having obtained a certificate of incorporation under this Act), it is enacted as follows: "When all moneys intended to be secured by any mortgage or further charge given to a society under this Act in England or Ireland have been fully paid or discharged, the society may indorse upon or annex to such mortgage or further charge a reconveyance of the mortgaged property to the then owner of the equity of redemption or to such persons and to such uses as he may direct, or a receipt under the seal of the society countersigned by the secretary or manager in the form specified in the schedule to this Act, and such receipt shall vacate the mortgage or further charge or debt, and vest the estate of and in the property therein comprised in the person for the time being entitled to the equity of redemption, without any reconveyance or re-surrender whatever; and if the said mortgage or further charge has been registered under any Act for the registration or record of deeds or titles, the registrar under such Act, or his deputy or assistant registrar, or the recording officer, as the case may be, or, in the case of copyholds or lands of customary tenure, if the mortgage or further charge has been entered on any court rolls, the steward of the manor, or his deputy, respectively shall, on production of such receipt verified by oath of any person, make an entry opposite the entry of the charge or mortgage, to the effect that such charge or mortgage is satisfied, and shall grant a certificate either on the said mortgage or charge or separately to the like effect, which certificate shall be received in evidence in all Courts and proceedings without any further proof, and which entry shall have the effect of clearing the register or record of such mortgage, and the registrar or recording officer shall be entitled to a fee of two shillings and sixpence for making the said entry and granting the said certificate, and such fee shall in Ireland be paid by stamps and applied as the other fees of the Registry of Deeds Office and Record of Title Office are now by law directed to be paid and applied." The question as to the effect of a statutory receipt has frequently come before the Courts for determination. It will be observed that the language of both statutes on this point is very similar, so that it would seem that decisions on cases arising under the Act of 1836 are generally applicable to cases arising under the later Act. It appears to be the settled rule that a receipt given under either of the Acts vests the legal estate in the person who in equity is best entitled to call for it, and not necessarily in the person who actually paid off the society. Thus, where there are successive equitable mortgagees, and the society is paid off by the mortgagor, the effect of the statutory receipt is to vest the legal estate in the equitable mortgagee who is first in point of time, unless the society is paid off by an equitable mortgagee who had no notice of prior incumbrances, in which case the legal estate vests in that mortgagee, notwithstanding that there are incumbrances prior to his in point of date (e). In Pease v. Jackson (f), a legal mortgage was made to a building society constituted under the Act of 1874, and the mortgagor subsequently gave a second mortgage to the plaintiff ; the defendants, at the request of the mortgagor, paid off the first mortgage; a receipt was accordingly indorsed on that mortgage, and the title deeds were handed over to the defendants, who had no notice of the plaintiff's charge; the mortgagor at the same time executed a mortgage of the property to the defendants to secure the amount paid by them to the society, together with a further advance to the mortgagor. It was held that the defendants had the better equity, and that, therefore, the rule "qui prior est tempore potior est jure" did not apply; and further, that on the satisfaction of the first mortgage, the legal estate vested, by virtue of the statute, either in the mortgagor, or in the persons who had the best right to call for it, in either of which cases it passed to the defendants. CHAP. XXX. further advances. In several cases (g) it was also decided that a third person Tacking paying off a building society, who obtains a receipt and the title deeds, and takes a mortgage to secure the amount so paid and a further advance to the mortgagor, is not entitled to tack the further advance. But this part of the decisions referred to has been overruled by the House of Lords in Hosking v. Smith (h), in which the circumstances were very similar to those in Pease v. Jackson. It was held that the person who paid off the society, at the request of the mortgagor, and without notice of an intermediate charge, taking a fresh mortgage for the money paid and a further advance, had priority, by virtue of the receipt on the first mortgage, over the second mortgagee, not only in CHAP. XXX. respect of the money paid to the society, but also in respect of the advance made to the mortgagor. Effect of statutory vacating the debt. It is to be observed, however, that sect. 5 of the Act of 1836 receipt as to provides that the effect of the receipt shall be to vacate the "mortgage or further charge," but that by sect. 42 of the Act of 1874 the effect of a receipt under that Act is to vacate the "mortgage or further charge or debt." And, accordingly, in two cases arising under the earlier Act, it was held that a covenant in a mortgage given by an advanced member to pay subscriptions until every member should have realized a specified sum per share, was not put an end to by the indorsement on the mortgage of a statutory receipt (). But, in a later case, where the society was incorporated under the Act of 1874, and an advanced member had mortgaged property to secure a loan and all further payments due from him to the society, it was held by the Court of Appeal that the indorsement of a statutory receipt, though given under a mistake, put an end to the covenant in the mortgage, not only as to the principal and interest, but also as to all payments in respect of shares, and precluded the society from saying that there was any debt due from the mortgagor (j). Reconveyance by deed, by unincorporated society, There is a further difference in the language of the two statutes in that the Act of 1836 merely authorizes the giving of a receipt, the effect of which is to vacate the charge and vest the estate in the person entitled to the equity of redemption without necessity for a reconveyance; but the Act of 1874 empowers a society to indorse on or annex to the mortgage either a reconveyance or a receipt which is to operate to vacate the charge or debt, and vest the estate "without any reconveyance or surrender." And it further provides for the entry on court rolls, and the giving of certificates of satisfaction in the case of mortgages of copyholds. The trustees of an unincorporated society may still reconvey mortgaged property by deed instead of giving a statutory receipt; but, if so, apparently, the reconveyance will operate under the ordinary law as would any other reconveyance, and the rights of parties will be regulated accordingly (k). (i) Farmer v. Smith, 4 H. & N. 196; (k) Carlisle Banking Co. v. Thompson, 28 Ch. D. 398 (a case under the Friendly Societies Act, 1875). So, also, if the trustees of an unincorporated society have been admitted to copyholds, it seems that a re-surrender will be necessary (). If, however, an incorporated society executes a reconveyance instead of giving a statutory receipt, sect. 42 of the Act of 1874 requires the reconveyance to be made "to the owner of the equity of redemption, or to such persons and to such uses as he shall direct," and the effect will be to vest the estate in such person or persons, and in him or them only; the statutory reconveyance and the statutory receipt are alternative modes of attaining the same object, viz., the vesting of the legal estate in the same person, that is, the owner for the time being of the equity of redemption (m). CHAP. XXX. by incorpo rated society. after incor poration. If a mortgage made to the trustees of an unincorporated by society society which is subsequently incorporated, is paid off after incorporation, then, inasmuch as by sect. 27 of the Act of 1874 the property vested in the society on incorporation without transfer by the trustees, the indorsed receipt or reconveyance given by the society will effectually vacate the mortgage and vest the legal estate by virtue and in accordance with the statute (n). SECTION II. OF MORTGAGES TO FRIENDLY SOCIETIES. i. Power of Friendly Societies to lend on Mortgage.-The Repeal of Friendly Societies Acts of Geo. IV. and Will. IV. (o), referred former Acts. to in the early part of this Chapter, were repealed by the Friendly Societies Act, 1855 (p); and that Act was, in its turn, repealed by the Friendly Societies Act, 1875 (q), whereby all the enactments then in force relating to such societies were repealed, and the law on the subject was consolidated and amended. (1) See Barry on Building Societies, p. 115. (m) Per Jessel, M. R., in Fourth City Mutual Benefit Building Society v. Williams, 14 Ch. D. 140, at p. 146. and see Fourth City Mutual Benefit (n) See s. 27, set out ante, p. 549; (p) 18 & 19 Vict. c. 63. |