Consolidating securities. of the gross negligence (t) of those whom he employed, but not acts of fraud on their part (u). Notice may also, in certain cases, be given by entries in the public registers; and, however given, it is sufficient if it makes the mortgagee aware of the existence of incumbrances, although it may not be accurate as to the particulars or extent of such charges (v). So strictly is the rule as to notice enforced in equity, that even though a mortgage be made expressly to secure, not only a sum of money then lent, but also further advances on the same property, yet the mortgagee cannot tack such further advances if, at the time of making them, he had become aware of the existence of an intermediate incumbrancer (w). For the deed does not bind him to make further advances, and if he chooses to make them under such circumstances, he must trust to the general solvency of his debtor. The result is the same, even where there is a mortgage deed to secure present and future advances (the latter being limited to a certain amount), and another person afterwards, but before any such future advances being made, lends money on the equity of redemption, "subject to the security already given (x)." But if the further advances are made without notice of an intervening charge, the mortgagee may tack although he may have, after its creation, substituted another form of security for that originally given (y). The last of the mortgagee's rights which we have to mention, is that of Consolidating his Securities. As regards mortgages made after the 31st December (t) Rolland v. Hart, L. R. 6 Ch. 678. (u) Kennedy v. Green, 3 My. & K. 699. (v) Gibson v. Ingo, 6 Ha. 112, 124; Jones v. Williams, 24 Beav. 47. (w) Shaw v. Neale, 20 Beav. 157: Hopkinson v. Relt, 9 H. L. C. 514(r) Menzies v. Lightfoot, L. R. 11 Eq. 459. (y) Calisher v. Forbes, L. R. 7 Ch. 109. Act, 1881. 1881, the Conveyancing Act, 1881 (2), prevents the Conveyancing mortgagee from consolidating unless the mortgage deed either expresses an intention that he shall have that right, or excludes the operation of that Act. The reader will therefore understand that the following remarks apply only to those mortgages which are not affected by that statute. If the owner of different estates mortgages them to one person separately for distinct debts, or successively to secure the same debt, or the same debt with further advances, the mortgagee may, provided the legal right of redemption in all the securities be lost (a), insist that one security shall not be redeemed unless all the others are redeemed also; and it is immaterial, in such a case, that of the various securities to be consolidated some are legal and others merely equitable (b). This right, as exercised against the mortgagor, is founded on the maxim that he who seeks equity must do equity, and, consequently, a mortgagor coming to a Court of Equity for help to redeem his mortgaged estate, forfeited at law, can get no assistance unless he is prepared to do equity by paying his creditor all that is due to him. It will Distinction bebe observed that this right differs from that of tack- and consolidattween tacking, ing, for that is the right to throw a series of debts on ing securities. the same estate, this, the right to make separate estates liable for one consolidated debt; that is founded on legal possession, this, on a doctrine peculiar to equity. extends to fore The rule as to consolidation extends to the case of a Consolidation foreclosure action, as well as to that of one for redemp-closure action. tion, and a mortgagee could, therefore, in the cases put above, foreclose the equity of redemption of any (2) 44 & 45 Vict. c. 41, s. 17. (a) Cummins v. Fletcher, 14 Ch. D. 699. (b) Watts v. Symes, 1 De G. M. & G. 240; Neve v. Pennell, 2 H. & M. 170; Tweedale v. Tweedale, 23 Beav. 341. Assignee of a mortgagee may consolidate. gagor's assigns. one estate, unless paid the whole amount due on the security of all (c). Moreover, the benefit of the mortgagee's right to consolidate may remain, although one of his securities may have gone. If, for instance, two estates are mortgaged to the same person, and he cannot obtain, on selling one of them, the amount due on it, he may throw the balance owing to him on the property which remains in his hands (d). Nor does the right apply only to the simple case of an original mortgagor and mortgagee. Hence, if A. mortgages one estate to B., and another to C., and C. afterwards takes an assignment of B.'s mortgage, he Consolidation can consolidate his two securities and hold them both against mort- until he is paid in full, provided that the equity of redemption in both of them is still vested in the mortgagor, or in persons claiming under him otherwise than as purchasers for value. But if mortgages be made of two estates to two different persons, and subsequently one of those persons becomes owner of both the securities, he cannot consolidate as against a purchaser, or a second mortgagee, of the equity of redemption in either of them, unless the two securities united in him before such purchase, or second mortgage, was made; and it makes no difference whether he took his original mortgage before or after the equity of redemption had been dealt with (e). Neither can a single mortgagee of two distinct estates, mortgaged at different times, consolidate as against a person who has bought, or lent money on the security of the equity redemption in, the earlier mortgaged estates, unless both estates were mortgaged prior to the sale or mortgage of the equity of redemption (f). The result of the recent decisions on which the above (c) Watts v. Symes, 1 De G. M. & G. 240; Neve v. Pennell, 2 H. & M. 170; Tweedale v. Tweedale, 23 Beav. 341. (d) Selby v. Pomfret, 1 J. & H. 336. See remarks of Cotton, L. J. in Cummins v. Fletcher, 14 Ch. D. p. 714. (e) Harter v. Coleman, 19 Ch. D. 630. statements are founded may be expressed by saying that a mortgagee's right to consolidate is not to be exercised against assigns of the mortgagor unless it could have been exercised against the mortgagor himself at the time when they took their assignment. It may be added that the modern rule puts the mortgagor's assigns in a much more favourable position than they were in formerly (g). solidation The mortgagee's right to consolidate never held But no congood against persons whose equities of redemption against distinct had been, all along, distinct from that of the mortgagor equities of redemption. against whom he sought to enforce it. Hence, where (h) A. mortgaged his estate, and then B. mortgaged his estate to the same person, and A. at the same time gave a further charge on his estate in order to secure the loan to B.; it was held that B. was entitled to redeem his estate on payment of that sum only which had been advanced to him. On the same principle, if an estate, belonging partly to A. and partly to B., be mortgaged to secure a joint advance to them; and then property belonging to A., and partly comprised in the first mortgage, be conveyed to the same person to secure a sum advanced to A. alone; B. can redeem on payment of the sum first advanced, without reference to the subsequent loan to A. (i). Hitherto we have considered only the case of a Second mortmortgagee who has taken a conveyance of the legal gagees. estate in the property which forms his security, but a few remarks are now necessary respecting those mortgagees who advance their money on land which is already in pledge, and who may be called, for convenience, second mortgagees, although, of course, there may (g) See Vint v. Padgett, 2 De G. & J. 611; Beevor v. Luck, L. R. 4 Eq. 537. (h) Aldworth v. Robinson, 2 Beav. 287. (i) Higgins v. Frankis, 15 L. J. (Chy.) 329; and see Jones v. Griffiths, 2 Coll. 207. May sue on enter into pos- be any number of successive mortgages on the same property. Assuming that the mortgage of such an one is made by an ordinary mortgage deed, but subject to a pre-existing mortgage, we see at once that Rights not the his rights are not identical with those of a legal mortsame as a legal mortgagee's. gagee. He can sue the mortgagor on his covenants for payment, and the remarks previously made on this point apply to all mortgagees equally. But he cannot take possession of the property, for the right to take possession of land is founded on legal ownership of it. Again, if he wishes to realise his security by the aid of the Chancery Division, his position is different from that of the legal mortgagee. For although, if he only wishes to foreclose the mortgagor or subsequent incumbrancers, he need not bring the first mortgagee before the court (j), yet, since this foreclosure will only extinguish the rights, in respect of the property, of the mortgagor and those claiming under him (including subsequent incumbrancers), he has still, if he wishes to satisfy his debt, to redeem the first mortgagee; his action, therefore, more usually presents the two-fold aspect of seeking for redemption against the first mortgagee, and foreclosure against the mortgagor and all subsequent incumbrancers; in which case, or even where he only seeks to redeem the first mortgagee, all persons interested in the property must be made parties to the action (k). Judgment. He can thus obtain a judgment, which will begin with a direction for taking an account of what is due to the first mortgagee, followed by an order that the plaintiff shall redeem him within six months, or have his action dismissed with costs: but that, on his redeeming an account shall be taken of what is due to him, with an option to be given to each incumbrancer in succession, and finally to the mortgagor, to redeem (j) Richards v. Cooper, 3 Beav. 504; Audsley v. Horn, 26 Beav. 195. (k) Fell v. Brown, 2 Bro. C. C. 275; Farmer v. Curtis, 2 Sim. 466. |