Consolidation. originally granted to the same mortgagee or, having been originally vested in different persons, have by assignment become vested in the same person (1). A mortgagee, in fact, as the law was stated in the House of Lords, who holds several distinct mortgages under the same mortgagor, may within certain limits and against certain persons, consolidate them, that is, treat them as one, and decline to be redeemed as to any unless he is redeemed as to all. The reason of the law as to consolidation has been stated as follows: "The principle upon which the Court proceeds is that he who seeks equity must do equity. The Court refused to assist a mortgagor in getting back one of his estates unless he paid all that was due, though secured on a different estate. The mortgagor was coming into a Court of Equity to obtain its assistance in getting back an estate which at law belonged to the mortgagee, and it was held to be inequitable to allow him to get back an estate of more value than the debt charged on it, and to leave the mortgagee with an estate charged with a debt due by the mortgagor which might be of larger amount than the value of the estate." The law as to consolidation of mortgages applies to all mortgages whether legal or equitable, whether of real or personal property, and in actions whether for foreclosure or redemption; but the leaning of the Courts in modern cases has been against anything in the nature of an extension of the doctrine. Thus it has been held that the doctrine does not apply to a case where default has not been made on all the securities in respect of which the right to consolidate is claimed (2). In another case where one of the securities, a lease which had been determined by bankruptcy, had ceased to exist, it was held that there could be no consolidation of the two debts (3). A great change has been introduced into the law with regard to consolidation of mortgages by the Conveyancing Act, 1881 (1). It provides that a mortgagor seeking to redeem any one mortgage shall, by virtue of the Act, be entitled to do so, without paying any money due under any separate mortgage made by him, or by any person through whom he claims, on property other than that comprised in the mortgage which he seeks to (1) Mills v. Jennings, 13 Ch. D. 639, 646, reported in the House of Lords as Jennings v. Jordan, 6 App. Cas. 698. (2) Cummins v. Fletcher, 14 Ch. D. (3) In re Raggett, 16 Ch. D. 117; Clerke and Brett's Conveyancing Acts, 3rd ed. p. 93; Brett's Leading Cases in Equity, p. 178. (4) 44 & 45 Vict. c. 41, s. 17. redeem. The section, however, only applies if and as far as a contrary intention is not expressed in the mortgage deeds or one of them, and where the mortgages or one of them are or is made after the 1st of January, 1882, the date of the commencement of the Conveyancing Act. Next after the law as to consolidation may be noticed the law "Tacking.” as to "tacking," as it is technically called. Consolidation relates to several mortgages on different properties. Tacking relates to several mortgages on the same property. In other words con solidation is the right to throw together several mortgages on several estates. Tacking is the right to throw together several debts lent on the same estate. In dealing with the question of priorities between the various incumbrancers on an estate two great principles must be borne in mind: (1) that where the equities are equal the person who has the legal estate is to prevail, and (2) that, where the equities are in all other respects equal, the incumbrancers rank in order of time according to the maxim, "Qui prior est tempore potior est jure" (1). It is a settled rule that when a mortgagee has the legal estate and makes a further advance, and has no notice of any claim adverse to his title, being a purchaser for valuable consideration, he is entitled to tack the further advance to the original mortgage (2). The doctrine, however, has a wider application, and is not limited to cases where the purchaser or mortgagee acquires the legal estate in the first instance or before notice of a prior incumbrance. Thus, suppose a third mortgagee has advanced his money without notice of a second mortgage, he may purchase the first mortgage which gives him the legal estate, tack his third mortgage thereto and squeeze out the second incumbrancer. The legal estate thus obtained is called the tabula in naufragio (the plank in the shipwreck), for which the incumbrancers are entitled to struggle. The Yorkshire Registry Act provides that no priority or protection is in future to be allowed to any estate or interest in lands by tacking it to any legal estate therein, as to lands within the three Ridings of Yorkshire (except as against estates existing prior to this Act), even though the party claiming such priority or protection claims as a purchaser for value without notice (3). (1) Prideaux Conveyancing, vol. i. 14th ed. p. 503, citing Fonblanque on Equity; Rice v. Rice, 2 Drew, 73. (3) Young v. Young, 3 Eq. 805. (3) 47 & 48 Vict. c. 54, s. 16. It must be borne in mind that the doctrine of tacking was abolished between 7th Aug. 1874, and 1st Jan. 1876; see Marshalling Law as to pledge. The statutory covenants implied by the Conveyancing Act in a conveyance by way of mortgage by a person who conveys and is expressed to convey as beneficial owner, are absolute and not limited as in a conveyance for value other than a mortgage; see, as to the covenants where a person is expressed to convey as mortgagee or trustee (ante, p. 89). In the absence of special agreement, simple interest only can be charged in a mortgage account. Where such mortgage account had been settled on the footing of compound interest with half-yearly rests, both parties wrongly understanding the mortgage deed to require the same, it was held that such settled account might be re-opened (1). The doctrine of marshalling in its relation to the subject of mortgages must here be noticed. If A. has a charge upon Whiteacre and Blackacre, and if B. also has a charge upon Blackacre only, A. must take payment of his charge out of Whiteacre, and must leave Blackacre so that B., the other creditor, may follow it and obtain payment of his debt out of it; in other words, if two estates, Whiteacre and Blackacre, are mortgaged to one person, and subsequently one of them, is mortgaged to another person, unless Blackacre is sufficient to pay both charges, the first mortgagee will be compelled to take satisfaction out of Whiteacre, in order to leave to the second mortgagee Blackacre, which alone he can go (2). upon In connection with this subject it will be desirable to direct the reader's attention to the law with regard to pledges of personal property, which has been well summed up in a case which came before the Court of Appeal in 1886, as follows: "There is another entirely distinct transaction, which was known to the Romans, and has long been familiar to English law, the transaction of a pawn or pledge (3). In this there must be a delivery of the goods pledged to the pledgee, but only a special property in them passes to him, in order that they note Clerke & Brett's Conveyancing (1) Daniell v. Sinclair, 6 App. Cas. may be dealt with by him, if necessary to enforce his rights— the general property in the goods remaining in the pledgor. A special property in the goods passes to the pledgee in order that he may be able-if his right to sale arises to sell them. In all such cases there is at Common Law an authority to the pledgee to sell the goods on the default of the pledgor to repay the money, either at the time originally appointed, or after notice by the pledgee. If the pledge is accompanied by a written document, still the essence of the transaction is that actual possession of the goods should be given to the pledgee." When a purchaser buys property subject to a mortgage debt, he should ascertain by inquiry in writing the existing state of the mortgagee's debt, and it should be stated that the inquiry is made on behalf of an intending purchaser. A purchaser is bound to indemnify the vendor against the mortgage debt, and a covenant to so indemnify him is not necessary (1), but is usual. (1) Waring v. Ward, 7 Ves. 337. Definition. CHAPTER XI. LEASES. A lease (1) is a conveyance by way of demise of lands or tenements, for life or lives, for years, from year to year, or at will. A lease must always be for a less term than the party conveying has himself in the premises; for, if it be for the whole interest, it is an assignment and not a lease. A tenant from year to year, however, since he has an estate for an indefinite period may underlet from year to year, or for a term, and it will not operate as an assignment (2). A lease is usually made in consideration of rent, or some other annual recompense rendered to the party conveying the premises-who is called the lessor or landlord-by the party to whom they are conveyed or let, who is called the lessee or tenant. It must be borne in mind that "almost every sort of tenements and hereditaments, incorporeal as well as corporeal, advowsons, annuities, corrodies, leases, estovers, ferries, fisheries, franchises, rights of common, rights of herbage, rights of way, tithes, goods, furniture, sheep, and other live animals, and almost all else, even offices of trust, save those connected with the public revenue and justice, may be let on lease for a term of years, and that leases of live stock are among the most ancient known to the law." The usual leases of course are those of land and houses (3). A lease must entitle the tenant to exclusive possession, for some definite period, of the matter demised. If a mere limited right to use premises is conferred and the property remains under the control of the owner, a licence and not a lease is created. (1) Woodfall's Landlord and Tenant, 14th ed. p. 129; Redman & Lyon's Landlord and Tenant, p. 2, et seq., where the authorities are collected. A lease is defined by Mr. Prideaux to be an assurance or contract whereby land or any other thing capable of being demised is let by one person to another for an interest less (2) Redman & Lyon, p. 360. |