sale], of the second part; E. F., of, &c. [purchaser], of the third part; and G. H., of, &c. [trustee for the pur takes a conveyance to himself of the equity of redemption, he cannot afterwards set up his mortgage against any of the subsequent incumbrances of which he had notice: Toulmin v. Steere, 3 Mer. 210; Brown v. Stead, 5 Sim. 535; see, too, Smith v. Phillips, 1 Keen, 694. But it seems, that, if a purchaser actually keep on foot a prior mortgage to which he may be entitled, or any mortgages which he may pay off, he will be entitled to the benefit of them against subsequent incumbrancers: Parry v. Wright, 1 S. & S. 369; S. C. 5 Russ. 142; Titley v. Davies, 2 Y. & C. C. C. 399, n.; Forbes v. Moffatt, 18 Ves. 384. The distinction, as Lord St. Leonards observes, is a very subtle one; but, being established, it becomes necessary for any purchaser who has reason to suspect the existence of incumbrances subsequent to any mortgages which he may pay off, to have these mortgages kept on foot for his protection. If he simply pays them off in the usual way, he loses the protection they afford. Mortgages may be kept on foot in a variety of ways: the manner in which the object is effected in the Precedent in the text is perhaps the one most commonly adopted, but it is liable to the objection that it leaves the legal estate outstanding in a trustee. The legal estate might be limited to the purchaser in trust, in the first place, for securing the mortgage debt to the trustee, and subject thereto for the benefit of the purchaser himself. The Precedent in the text, moreover, can be used only when the mortgagee is willing to assign the mortgage debt; but a mortgagor has no right to require a mortgagee to assign the mortgage debt when he is paid off: Dunstan v. Patterson, 2 Ph. 345; and mortgagees occasionally refuse to make such an assignment. In such cases the mortgage may be kept alive without an assignment of the debt, and the legal estate may be vested in the purchaser in the manner shown in Precedent XXIII. post, p. 303, by a plan which seems free from objections; though it is said to be the more prudent course not to rely on a mere declaration of intention, but to let the sum itself, and also the term for years, if there be one, for securing it, be assigned to a trustee for the purchaser; or to let a declaration of trust be executed by the incumbrancer and the legal owner of the term: Dart, 329. A mortgagee purchasing the equity of redemption preserves his mortgage unmerged by taking a conveyance to a trustee with a declaration of his intention to that effect: Bailey v. Richardson, 9 Hare, 736; and a mortgage is not necessarily merged by taking a conveyance of the equity of redemption without a saving declaration, the presumption being that a purchaser means to keep a charge on PRECEDENT XXII. BY MORTGAGEE AND TRUSTEE, FOR SALE, MORTGAGE KEPT ON FOOT. brances for the benefit of a purchaser. PRECEDENT XXII. AND TRUSTEE, FOR SALE, ON FOOT. chaser], of the fourth part: [Recital of mortgage, supra, BY MORTGAGEE p. 273; Recital of a conveyance of the equity of redemption to C. D., in trust for sale, with power to give receipts MORTGAGE KEPT to purchasers]: AND WHEREAS the said C. D. has agreed with the said E. F. for the sale to him of the fee simple in possession of the messuages, lands, and hereditaments hereinafter expressed to be hereby granted, free from incumbrances, at the price of £1500; AND WHEREAS the said sum of £, together with £ for interest thereon, making together £-, is now owing on the security of the said indenture of the day of; 2. Recital of sale; amount due on the mortgage; 4. that mort- AND WHEREAS it has been agreed that the said sum of £ shall be paid to the said A. B. out of the purchasemoney of £, and that the said mortgage shall be kept on foot for the benefit of the said E. F., in manner hereinafter mentioned: NOW THIS INDENTURE WITNESSETH, that, in pursuance of the said agree-consideration, ment, and in consideration of the sum of £ -receipt by mortgagee; -further consideration, -receipt by trustee, upon the execution of these presents paid to the said A. B. by the said E. F., at the request of the said C. D., testified by his being a party to and executing these presents (the receipt whereof the said A. B. doth hereby acknowledge), and in consideration of the sum of £- at the same time paid to the said C. D. by the said E. F. (the payment and receipt in manner aforesaid of which said sums of £ and £, making together the said purchasemoney of £, the said C. D. doth hereby acknowledge), foot if such a course will be beneficial to him: Forbes v. Moffatt, 18 Ves. 384; but a mortgagor cannot, by taking an assignment of the debt to a trustee for himself or otherwise, keep alive as against subsequent incumbrancers a prior mortgage. See the judgment of Wood, V.-C., in Otter v. Lord Vaux, 2 K. & J. 650. Where a mortgagor contracts to sell the fee simple of the mortgaged estate free from incumbrances, the purchaser, with the concurrence of the mortgagee, is entitled, on procuring a discharge of the vendor from all liability in respect of the mortgage debt, and bearing any extra expense occasioned by his demand, to require a conveyance of the equity of redemption, so as to keep the mortgage on foot: Cooper v. Cartwright, Johns. 679. PRECEDENT XXII. he the said A. B., at the request of the said C. D., and on the nomination of the said E. F. (testified by their severally being parties to and executing these presents), BY MORTGAGEE doth hereby assign unto the said G. H., his executors, administrators, and assigns, ALL THAT the said principal MORTGAGE KEPT AND TRUSTEE, ON FOOT. -assignment of mortgage debt to trustee, attorney. in trust. sum of £1000 owing on the security of the said indenture of the day of as herein before is mentioned, and all interest now due or henceforth to become due for the same, and the full benefit of the covenant contained in the same indenture for payment thereof, and of all other securities for the same; AND ALL the estate, right, title, interest, claim, and demand of him the said A. B. in, to, or upon the same premises and every part, thereof, TOGETHER with power in the name of the said power of A. B., his executors or administrators, or otherwise to demand, sue for, recover, and give valid receipts for the said principal money and interest: To HAVE AND TO 6. Habendum, HOLD all the said premises hereinbefore expressed to be hereby assigned unto the said G. H., his executors, administrators, and assigns, upon the trusts hereinafter declared. AND THIS INDENTURE ALSO WIT- 7. Witnesseth NESSETH, that, in further pursuance of the said agreesecondly: ment, and for the considerations aforesaid, he the said A. B., -conveyance of the freehold. at such request and upon such nomination as aforesaid (testified as aforesaid), doth hereby grant and release, and he the said C. D. doth hereby grant and confirm, unto the said E. F. and his heirs [Parcels, supra, pp. 207, 210, 213, 215, or 219,-General Words, supra, p. 208]: TO HAVE 8. Habendum, AND TO HOLD all the said premises hereinbefore expressed to be hereby granted unto the said E. F. and his heirs, TO THE USE of the said G. H., his heirs and assigns, for better securing to him the said G. H., his executors, mortgage debt, administrators, and assigns, the said principal money and interest hereinbefore expressed to be hereby assigned, and subject and without prejudice to the payment of the said principal money and interest, in trust for the said E. F., his heirs and assigns, and to be conveyed and disposed of as the said E. F., his heirs and assigns shall direct; AND IT IS HEREBY agreed and declared, that the 9-declaration. -to use of trustee, for securing and subject thereto, in trust for purchaser; PRECEDENT AND TRUSTEE, FOR SALE, MORTGAGE KEPT ON FOOT. of trust of mortgage money. said G. H., his executors, administrators, and assigns, shall stand possessed of the said premises herein before BY MORTGAGEE expressed to be hereby assigned, upon trust, to assign and dispose of the same as the said E. F., his heirs and assigns, shall direct; in the meantime to permit and suffer the said premises to wait upon and attend the reversion, freehold, and inheritance of the said premises. herein before expressed to be hereby granted, and to protect the same from all mesne incumbrances, if any such there be. [Covenant by A. B. and C. D. with G. H., his heirs, executors, administrators, and assigns, that they have not incumbered the premises assigned and granted respectively, supra, p. 269. IN WITNESS, &c. XXIII. PRECEDENT CONVEYANCE to TENANTS in COMMON in FEE of a XXIII. MILL AND MACHINERY TO TENANTS IN MORTGAGE KEPT 1. Parties. Woollen Mill by DEVISEES and EXECUTORS of a THIS INDENTURE, made, &c., between A. B., of, &c., and C. D., of, &c. [devisees and executors of mortgagee], of the first part; E. F., of, &c., and G. H., of, &c. [executors of mortgagor], of the second part; I. K., of, &c., and L. M., of, &c. [purchasers], of the third part; and N. O., of, &c. [trustee], of the fourth part : [Recites mortgage in fee by J. W. to P. Q. for £4500, supra, p. 273, (a) See supra, p. 294, n. (a). The release in this Precedent of the equity of redemption to a trustee for the purchaser does not really vest any estate in the trustee, but it marks clearly the purchaser's intention of keeping on foot the mortgage: the purchaser takes the whole legal and equitable estate. PRECEDENT MILL AND MACHINERY TO TENANTS IN COMMON, MORTGAGE KEPT ON FOOT. Will of P. Q. devising estates vested in him as mortgagee to A. B. and C. D., and appointing them executors; his death, and probate of his will, supra, p. 278]: AND WHEREAS the said J. W. duly made and executed his last will and testament, dated, &c., and thereby ordered all his just debts and funeral expenses, and the charges of the probate of his said will, and the several legacies by him thereinafter bequeathed, to be paid and discharged out of his real and personal estate, and charged all his real and personal estate with the payment of the said legacies, and appointed his sons, the said E. F. and G. H., executors thereof (b): AND WHEREAS the said J. W. 3.-death of tes 2. Recites mortgagor's will, charging his debts on his real estate : tator; (b) Much controversy has arisen, and still exists in the profession, as to the power of executors to sell their testator's real estate under a simple charge of debts where the testator died before the 13th of August, 1859, on which day the Act 22 & 23 Vict. c. 35, came into operation. See Forbes v. Peacock, 12 Sim. 528; Robinson v. Lowater, 17 Beav. 592, affirmed 5 De G. M. & G. 272; Wrigley v. Sykes, 21 Beav. 337; Eidsforth v. Armstead, 2 K. & J. 333; Doe v. Hughes, 6 Exch. 223; Sugd. Pow. 122; Sugd. Stat. 316; Dart, 400, 476. Joshua Williams's pamphlet "On the Power of an Executor to sell Real Estate under a Charge of Debts," the notes infra, vol. ii., part 2, to the Precedent of a mortgage by executors for payment of debts; the result of the cases (a result which has not found favour with conveyancers) being, that "where there is in a will coming into operation before the 13th of August, 1859, a general charge of debts upon real estate, the executors have in equity an implied power to sell it, and they alone can give a valid receipt for the purchase-money; but as they do not take a legal power to sell, and cannot convey the legal estate, the persons in whom it is vested (if it be not already vested in the executors by devise or otherwise) must concur with them in the conveyance: " 1 L. Ca. Eq. 77. Previously to Robinson v. Lowater, and Wrigley v. Sykes, it was the opinion of many eminent conveyancers, that if in cases before the Act 22 & 23 Vict. c. 35, the ownership or dominion, by whatever means acquired, was vested in A., subject to a general charge of debts and legacies (as distinguished from a trust for payment of debts and legacies), at whatever period created, a purchaser from A. was within the protection of the rule which exonerates purchasers from seeing to the application of the purchase-money; and that it was not at all material whether A. or a stranger was named as executor; and in such cases it has been the Power of execu tors to sell real estate under a charge of debts before 22 & 23 Vict. c. 35. |