Interest is allowed on equitable deposits of deeds, though there Interest. is no contract for it (). rule. On a review of the decided cases establishing this mode of mort- Policy of the gage security, it is perhaps to be regretted that the old law was not adhered to, and the principle on which the Statute of Frauds was founded more respected. For although equity, by declaring the deposit itself to be evidence of an agreement executed, has contrived to evade the strict and literal wording of the statute, yet it is manifest that the door has been in some degree open to fraud and perjury; nor does a creditor seem to deserve much favour who will not be at the trouble of a few lines in writing (7) if he is desirous to have a charge on his debtor's estate. If the debtor denies that the deposit was intended to cover future advances, as in Exp. Mountfort (m), or if he insist that the deeds were not delivered by way of deposit but with a different intent, resort must, in many cases, be had to parol evidence; and, as remarked by Lord Eldon (m), "the mischief of all these cases is, that the Court is deciding upon parol evidence with regard to an interest in land within the Statute of Frauds." (k) Carey v. Doyne, 5 Ir. Ch. R. 104; Kerr's Policy, 8 Eq. 331, V. C. James. And see Lippard v. Ricketts, 14 ib. 291, V. C. Bacon. See inf. p. 942. 356 CHAPTER XXXII. WELSH MORTGAGES. Nature of Welsh mortgages. Account of rents. Mortgage in nature of Welsh mortgage. WELSH mortgages, as already remarked (a), closely resemble the ancient mortuum vadium described by Glanville, viz., a conveyance of an estate redeemable at any time on payment of the principal, with an understanding that the profits in the meantime shall be received by the mortgagee without account in satisfaction of interest (b). And this was also formerly, a common mode of mortgage in Ireland (c). No covenant for payment of the debt on the part of the mortgagor is inserted in the mortgage deed (d), and the mortgagee has no remedy to compel redemption or foreclosure in equity, though the mortgagor may redeem at any time (e)*, and the presence of a covenant to pay the principal and interest on demand is not such a limitation of the time as to lead to forfeiture, and so let in foreclosure (ƒ). If the amount of rents and profits be excessive, the Court will, on action brought by the mortgagor, decree an account, notwithstanding the agreement that the profits shall be retained in lieu of interest (g); and probably in the present day the Court would, in every instance, decree an account against the mortgagee of the rents and profits, whether the value was excessive or not. In some instances the estate is conveyed to the mortgagee and his heirs, until out of the rents and profits he shall have received principal and interest, which is in the nature of a Welsh mortgage, (a) Sup. p. 6. (b) See Talbot v. Braddyl, 1 Vern. 395. (c) Hartpole v. Walsh, 5 Bro. P. C. 275. (d) Lawley v. Hooper, 3 Atk. 280; King v. K. 3 P. Wms. 361. (e) Howell v. Price, Pr. Ch. 423; and see 1 Ves. S. 405. * Quære. -Whether the mortgagee might not maintain an action of debt on the loan, for every mortgage implies a debt. But semble not, Fish. Mtg. 5, ed. 3; 5, ed. 4; sup. p. 1. (f) Curtis v. Holcombe, 6 L. J. N. S. Ch. 156. And see O'Connell v. Cummins, 2 Ir. Eq. R. 251. (g) Fulthorpe v. Foster, 1 Vern. 477. See Alderson v. White, 2 De G. & Jo. 197; 4 Jur. N. S. 125; Longuet v. Scawen, 1 Ves. S. 403; Balfe v. Lord, 2 Dr. & W. 480. nature of and was compared by Lord Hardwicke () to a tenancy by elegit, so Mortgage in that as soon as the principal and interest were satisfied the estate Welsh ceased and the mortgagor might maintain ejectment, unless the mortgage. mortgagee had remained in possession twenty years (twelve years now (i)) after the debt was satisfied, at which time the Statute of Limitations would have begun to run; which circumstance would also bar the mortgagor of any equity of redemption (j). And his Lordship said that the mortgagor had the same right as the conusor under the elegit had, to come into a Court of equity for an account of the rents and profits; nor would the Court relieve the mortgagee from his own contract and agreement of being subject to a perpetual account (h). In a similar case, time was held no bar to redemption, although by the mortgagor's own showing upwards of sixty years had elapsed (1) since the mortgagee took possession. In Hartpole v. Walsh (m), a bill to redeem a mortgage in the nature of a Welsh mortgage was dismissed in the Irish Chancery, and on appeal to the House of Lords the judgment was affirmed; but in that particular case a second mortgage had been made to the same party, by which the mortgagor had agreed to repay the whole debt at any time after eighteen months' notice, and it was admitted that the notice had long since been given; which reduced it to the case of a common mortgage. But in a later case, Lord Lyndhurst considered the decision in the last mentioned case to have been made on the ground of the impossibility of taking the long and complicated accounts after the lapse of ninety years, and that the redemption suit had not been prosecuted with reasonable dispatch (n). In that case a reversion in fee, expectant on a life estate, had been demised for a term of 500 years, with a proviso for redemption on payment of the mortgage debt, but without any definite time fixed for payment, and the mortgagor covenanted to pay the mortgage debt on demand and that until payment the mortgagee might enter and enjoy the premises; Lord Lyndhurst held this to be in the nature of a Welsh mortgage, and dismissed a bill filed for foreclosure (n). In a case (o) before Lord Eldon, the doctrine of a mortgage in the nature of a Welsh mortgage, was fully recognised by the Court. (h) Yates v. Hambly, 2 Atk. 362. (i) Inf. 358. () And see 3 & 4 Wm. IV. c. 27, s. 28. (1) Orde v. Heming, 1 Vern. 418. (m) 5 Bro. P. C. 267. (n) Teulon v. Curtis, Yo. 619. (0) Fenwick v. Reed, 1 Mer. 114. Leases in nature of Welsh mortgages. Renewed lease at under value. Statute of Power authorizes Welsh mortgage. The L. C. observed that the transaction appeared to be in the nature of a Welsh mortgage, and that time would be no bar to redemption, unless it were proved that the party had held over for the space of twenty years (now twelve years) after the debt was fully paid and satisfied; that if it was not a case in which length of time alone would operate as a bar to redemption, the question still remained whether there were not circumstances to raise the presumption of a release from the long possession of the mortgagee. The question was submitted to a jury, who found a verdict for the mortgagor, which was sustained (p). Although a lease granted in consideration of a loan of money is impeachable, yet a lease granted as a security for a loan at a fair rent to be retained in payment of the debt is valid, and the Court will not enter into an enquiry as to the value of the rent after long acquiescence on the part of the debtor; and such a lease is in the nature of a Welsh mortgage (q). But in the same case, a renewed lease, granted before the expiration of the old lease, at the old rent, to secure the balance then due and a further loan, and which was, on the face of it, at an under value, was set aside as fraudulent, and the mortgagee made to account from that time for the full value of the premises (2); and, as being guilty of a fraud, was refused costs (q). Although by s. 28 of 3 & 4 Wm. IV. c. 27, as subsequently noticed (t), the right of redemption by a mortgagor was lost at the end of twenty years (now reduced to twelve) (u), next after the mortgagee takes possession, unless there has been some intermediate acknowledgment of right, yet it is conceived that this enactment cannot apply to the case of Welsh mortgages (in which the original stipulation is, that the mortgagee shall hold and receive the rents until his debt is satisfied) unless twenty (now twelve) years shall have elapsed from the period when, by the receipt of the rents, the mortgage debt and interest might have been paid. Where a man has power to raise money on mortgage, a Welsh mortgage is sufficient (x). (P) 5 B. & Ald. 233. (a) Morony v. O'Dea, 1 Ba. & B. 109. (u) 37 & 38 Vict. c. 57. (x) Gorman v. Byrne, 8 Ir. Com. L. 394. CHAPTER XXXIII. MORTGAGES BY TENANTS IN TAIL AND BY DEFECTIVE CONVEYANCE. 359 (1.) Mortgages by tenant in tail. tenant in tail. INSTANCES have occurred in which, from the circumstance of the Mortgages by title deeds being in the custody of a tenant for life in possession who has refused to permit them to be inspected, or from other circumstances, a mortgage security has been taken from a person as tenant in fee, who, on further inquiry, or on subsequent inspection of the title deeds after the estate has fallen into possession, has proved to be tenant in tail only. In this case, if the mortgage be by demise, the mortgagee obtains a term of years determinable by entry of the issue, and if in fee, he obtains a base fee determinable in like manner (a). It was, indeed, formerly held (b), that the estate of the grantee was void on the death of the tenant in tail, and not voidable only, but this was overruled by Lord Holt, in Machell v. Clarke (a). fine or If, prior to 3 & 4 Wm. IV. c. 74, the tenant in tail, whether in Subsequent possession or reversion (c), subsequently to the mortgage, and even recovery. without reference to it, levied a fine or suffered a common recovery, he would have let in the mortgage, although he declared the use of the fine or recovery to a subsequent mortgagee or purchaser (a) 2 Ld. Raym. 778; Tyrrell v. Mead, 3 Burr. 1705; Hankey v. Martin, 49 L. T. R. 560, Kay, J. (b) Litt. S. 613; Tooke v. Glasscock, 1 Wms. Saund. 260. (c) Freem. 310. |