BOOK THE FOURTH.

CHAPTER I.

OF NOTICE.

THE doctrine of notice so materially affects the remaining part of our subject, that it will be requisite to direct our attention to it before we proceed farther in our inquiry.

Notice is express or implied; to which may be added, a third sort of notice, viz. notice by statutory enactment, which does not come within either of the first mentioned species; for express notice is an actual knowledge of a given fact, regularly and formally communicated; and implied notice is a conclusion of law from violent presumption, which the courts will not allow to be controverted but the third species arises neither from actual knowledge nor from legal presumption, but, on the contrary, would not be classed within either of those species, and is therefore made notice by legislative enactment.

If a party having notice convey for a valuable consideration to one who has not notice, or if a party

not having notice convey to one who has notice, the party taking the conveyance will not, in either case, be affected by the notice; for, in the first instance, he may defend himself by his want of notice (a), and, in the second instance, by the want of notice in the party through whom he claims (b). And therefore, if A., having notice, sells to B., who has not notice, who sells to C., who has notice, B. is protected against the notice in A. by his own want of notice and C. is defended by the want of notice in B. (c).

It is however laid down in Bacon's Abridgment (d), on the authority of a case in Vernon (e), that if one take a mortgage by assignment from a mortgagee affected with notice of an outstanding title, he will take subject to that title; for his assignor cannot transfer to him a better title than he has himself; and if such original mortgagee, in a bill filed by the person setting up an eigne title against the mortgagee and his assignee, and praying to be let into possession, and charging notice, confess by his answer that he had notice before the lending of the money, that confession of notice will bind his assignee; for though the mortgagee's answer cannot be read against the assignee as evidence, yet he must

(a) Mertins v. Joliffe, Amb. 313; Ferrars v. Cherry, 2 Vern.

384.

(b) Harrison v. Forth, Pre. Ch. 51; 1 Eq. Ca. Ab. 331; Sweet v. Southcote, 2 B. C. C. 66; Andrew v. Wrigley, 4 B. C. C. 125; M'Queen v. Farquhar, 11 Ves. jun. 478.

(c) Lowther v. Calton, 2 Atk. 139; Bradwell v. Catchpole, 3 Swans. 78, note.

(d) 5 Vol. 76.

(e) Walley v. Walley, 1 Vern. 484.

stand in his assignor's place, and his assignor's confession of notice will bind him. In this doctrine Mr. Powell acquiesces (ƒ), and in support of it cites the case of Lord Pomfret v. Lord Windsor (g), in which an estate which was vested in trustees for raising a specific sum, was afterwards mortgaged with notice of that charge, and then a subsequent mortgage was made to one who had notice of the prior mortgage, but not of the antecedent charge, the Court held, the last mortgagee must take subject to the first charge. It is, however, submitted, that the case is not in point; for as the legal estate was outstanding, all the charges were alike equitable, and the question of notice did not, in fact, arise, and the reasoning of the Court on the point of notice, (so far as it went,) proceeded on a very different ground, viz. that as the persons having the equitable charge had a right to compel the first mortgagee who had notice of it to redeem them, then the first mortgagee, obtaining the legal estate from the trustees, would have a right to compel the second mortgagee to redeem both charges, or be foreclosed. Of this there could be no question; but to have rendered the case applicable to the point under discussion, the second mortgagee should have obtained an actual conveyance of the legal estate from the first mortgagee, and then, having the legal estate to protect himself, and having equal equity with the prior equitable incumbrancer, the question would have been fairly raised, whether, standing in the place of the first mortgagee

(f) Powell on Mortgages, vol. ii. 601, 4th edit.
(g) 2 Ves. 185.

quoad the legal estate, he was bound by the notice which his assignor had. To have decided this question in the affirmative, would apparently have been in contradiction to the well-known equitable maxim, that, where equities are equal, the legal estate shall prevail, on which the doctrine of tacking, hereafter discussed, is chiefly grounded, and in opposition to many well-considered cases in which that doctrine has been applied.

A doubt, however, of a somewhat similar nature is said to have been thrown out by Lord Eldon in the case of Mackreth v. Symmons (h) before alluded to. In that case, Lord Eldon is reported to have put this question, whether there was any case in which a third mortgagee had excluded the second, if the first mortgagee, when he conveyed to the third, knew of the second. His lordship remarked, when the case of Maundrell v. Maundrell (i) was before him, he looked for, but could not find such a case, viz. that where there was bad faith on the part of the first mortgagee, that equity was applied. It is reported, that Sir Samuel Romilly, answered, he did not believe that was ever decided, and there would be great difficulty in deciding it in favor of the third mortgagee, who puts himself in the place of the first. We shall, however, hereafter see, that a third mortgagee is allowed to tack pendente lite, even after a bill filed by a second mortgagee against the first and third mortgagees; and in which con

(h) 15 Ves. jun. 335.

(1) 10 Ves. jun. 246.

ment.

sequently, the first mortgagee must have had notice of the second mortgage at the time of the assignThe precise point, however, has been lately argued before the present Lord Chancellor, when Master of the Rolls, who decided that the notice given by the second mortgagee to the first mortgagee did not prevent the third mortgagee who lent his money without notice from tacking (i).

If there be fraud in the original creation of the mortgage, as, for example, if no money actually pass between the parties, and if the mortgagee afterwards assign to a third person for a valuable consideration, without notice of the fraud in the original transaction, and the mortgagor convey his equitable interest to a stranger for a valuable consideration without notice of the mortgage, the money paid on the assignment will make good the original transaction and purge the fraud (k).

In reference to the doctrine of express notice, equity does not require a party to take notice of vague rumours proceeding from strangers to the estate(); and it is expected that the notice shall be made with some degree of precision as to the nature of the supposed right, and not consist of a mere general and undefined claim (m); but whether the notice be express, or rest on rumour or on general claim, a purchaser or mortgagee can never be advised

(i) Peacock v. Burt, see Appendix.

(k) Andrew Newport's case, Ca. temp. Holt, 477; Skin. 423. (1) Wildgoose v. Wayland, Goulds. 147.

(m) Jolland v. Stainbridge, 3 Ves. jun. 478.