CHAPTER V. OF MORTGAGE DEEDS. WE come next to the consideration of the ordinary form of a mortgage deed of land. This, as we have noticed already, consists essentially of a conveyance of the mortgaged property to the mortgagee, with a proviso for its reconveyance when the debt secured by it is paid off. It contains, in addition, various other clauses which are necessary to give completeForm of moit- ness to the transaction. Where the subject of the gage. Freeholds. Leaseholds. mortgage is a freehold estate in land, the conveyance, ordinarily, takes the form of an absolute grant of it, subject to the proviso for redemption. On a mortgage of leaseholds, it is open to the mortgagee to take either an assignment of the whole term for which the property is held by the mortgagor or else a lease for a period a day short of the whole term. A question as to which plan is the better can only be answered by reference to the circumstances of each case. Generally speaking, if the covenants in the lease are not onerous, the mortgagee had better take an assignment of the whole term, as he thus gets the whole legal interest in it vested in himself (which is an advantage if he has to sell the property), and also obviates any risk of the lease being forfeited by the mortgagor's dealings with the reversion. On the other hand, the mortgagee, if he takes an assignment of the whole term, and even though he never enters into possession of the property, becomes liable to the lessor on all the covenants contained in the lease; since he who takes an estate, must, without reference to his object in And taking it, bear all burdens incident thereto (a). Since copyholds do not pass by deed, a mortgage Copyholds. of them takes, in the first place, the form of a covenant by the mortgagor that he will, immediately after the execution of the mortgage deed, surrender them to the lord of the manor to the use of the mortgagee. This is followed by the formal surrender, which is duly entered on the manor rolls, but expressed to be subject to a condition that on payment by the mortgagor, on a specified date, of all sums secured by his covenants in the mortgage deed (and to which we will refer presently) the surrender shall be void and of no effect (c). The mortgagee has not a legal title to the copyholds unless they are thus surrendered to him; and cannot, therefore, safely part with his money until the surrender is made, since, up to that time, he is liable to be postponed to any subsequent purchaser for value who has obtained a surrender without notice of the earlier mortgage (d). This conditional surrender, as it is called, leaves the mortgagor tenant of the manor (e), but prevents him from dealing with the property to the prejudice of the mortgagee, whilst it has, at the same time, the advantage of freeing the mortgagee from any liability to the lord of the manor, who, having the tenancy "full" already, has no further claims in respect of it. The mortgagee must, (a) Williams v. Bosanquet, 1 Brod. & B. 238; overruling Eaton v. Jaques, 2 Doug. 455. (b) Halford v. Hatch, 1 Doug. 183. (c) 2 Dav. Con. 408. (d) Oxwith v. Plummer, 2 Ver. 636. (e) Doe v. Wroot, 5 East, 132. The mortgage deed. Introductory Recitals. First Witnessing Part. however, be admitted a tenant of the manor if he wishes to realise his security by a sale of the property (f). We may add here that if the mortgage is paid off, an entry of its satisfaction, made on the manor rolls, is sufficient to restore the mortgagor to his original position (g). Having premised thus much, we will, pursuing our system in other cases, go through the various clauses of an ordinary mortgage deed of freeholds in feesimple, adverting, when necessary, to the differences between such clauses and those of a mortgage deed which deals with leaseholds, or with copyholds. The introductory part of the deed conforms to the rules which govern the corresponding portion of a purchase deed, as do also the recitals (h), except that the last introductory recital, when inserted, consists of a statement of the agreement for a loan, subject to its repayment being secured in the manner to be described in the deed. Next comes the first Witnessing Part. This consists more generally, though by no means universally, of a covenant by the mortgagor which, referring to, and acknowledging the receipt of, the sum lent, promises that in consideration thereof the mortgagor or his representatives will, on a specified day (usually six calendar months from the date of the deed), pay to the mortgagee, his executors, administrators, or assigns, the same sum, with interest in the mean time at a given rate per cent. We have, in our chapter on an equity of redemption, seen the advantages gained by inserting this covenant, which makes the mortgagee a specialty creditor of the mortgagor; a position which he would not hold otherwise, since the implied (f) See Flack v. Downing College, 13 C. B. 945. (g) Scriv. Cop. 100. (h) As to the construction put on recitals in a mortgage deed see Francis v. Minton, L. R. 2 C. P. 543. contract for repayment arising out of the loan raises a simple contract debt only (i). Then follows the second Witnessing Part. This Second Witcorresponds to the operative part of a purchase deed, nessing Part. and contains the words which convey the mortgaged property, by grant or by demise or assignment, according as it is freehold or leasehold, to the mortgagee, his heirs and assigns, or to him, his executors, administrators, and assigns. If the property is copyhold, the words of conveyance find a substitute in the covenant for surrender previously mentioned. The mortgagor, where the deed is made after the Conveyancing Act, 1881, came into operation, is expressed to convey as mortgagor; with the result that covenants for title by him are implied, which are nearly the same as those implied on a conveyance by a beneficial owner, but differ in one respect, namely, that whereas the implied covenants by an ordinary vendor only relate to the acts of himself, and of persons through whom he claims otherwise than by purchase, and of those who claim under him, a mortgagor's covenants contain no such limitation, but are without any qualification whatever (j). The conveyance, however, whatever its form may be, is made subject, in the case of freeholds or leaseholds, to a proviso for redemption on repayment of the sum advanced; and in the case of copyholds, to a condition for making void the surrender, corresponding with the proviso for redemption. After the operative part come the Parcels, which Parcels. are described in the usual way. These are followed by the Habendum, which limits the mortgagee's estate, Habendum. according to the nature of the mortgaged premises, and subject to the proviso for redemption which immediately follows. (i) Yates v. Aston, Q. B. 182; Isaacson v. Harwood, L. R. 3 Ch. 225. (j) 44 & 45 Vict. c. 41, s. 7. Proviso for The Proviso for Redemption in modern practice Redemption. takes the form of an agreement that if the mortgagor or those claiming under him shall, on the day already fixed by his covenant for payment of the principal and current interest, pay those sums to the mortgagee, his executors, administrators, or assigns, then the mortgagee will re-convey the property to the mortgagor, his heirs, or assigns. This covenant, it will be noticed, provides for repayment of the mortgage money to the mortgagee or his personal representatives, whilst the mortgaged estate is, when re-conveyed, to go to those persons to whom it would have belonged had there been no mortgage, that is, to the mortgagor and his heirs. Mortgage money made payable to personal representatives of The personal representatives of the mortgagee should be designated as those who are to receive the mortgage money, since a mortgage even in fee is the mortgagee. always considered personal assets of the mortgagee, and it is therefore inconsistent to introduce words which may seem to give his real representatives a right to the mortgage money. But it does not appear that any mistake of this kind would be of essential importance. For it has been decided (k)—where the mortgagee has died before the day fixed for paymentthat if no person besides himself has been named as the recipient of the mortgage money, his personal representatives alone are entitled to take it; and that if the proviso is for re-payment to the mortgagee's heirs or his personal representatives, the mortgagor, if he redeems after the day fixed for that purpose, can pay his money to the personal representatives only; although if he comes on the precise day he may pay it either to them or to the heir, who will, however, in that case, be considered a trustee for them (l); as he will be, also, if the mortgagee and his heirs have alone (k) Thornborough v. Baker, 3 Swan. 628, and, with notes, 2 L. C. 1046. (1) Kendall v. Micfield, Barnard. 46, 50. |