No. 27.

TRANSFER of a MORTGAGE IN FEE with Power of
Sale, to a new Lender, with a further Charge.
[New Form, founded on No. 26].

THIS INDENTURE, made the

day of

in the

year of our Lord, BETWEEN [mortgagee], of &c., of the Parties. first part; [mortgagor], of &c., of the second part; [transferee], of &c., of the third part; and [trustees for transferee], of &c., of the fourth part. WHEREAS, by an indenture (139) RECITALS dated the day of in the yearand made be--of mortgage; tweeen the said [mortgagor], of the first part; the said [mortgagee], of the second part; and [trustees for mortgagee], of the third part; in consideration of the sum of £, paid by the said [mortgagee] to the said [mortgagor], All [parcels], with their appurtenances, were limited by the said [mortgagor], To the use of the said [mortgagee], his executors, administrators, and assigns, for the term of 500 years, to be computed from the date thereof, without impeachment of waste, And, subject to the said term, To the use of the said [trustees for mortgagee], their heirs and assigns, In trust for the said [mortgagee], his heirs and assigns; subject to a declaration that the use thereinbefore limited to the said [mortgagee], his executors, administrators, and assigns, and the use therein before limited to the said [trustees for mortgagee], their heirs and assigns, should be

the said [new mortgagee], his heirs and assigns, subject nevertheless to such right and equity of redemption as the said premises are subject to.'

"The power of sale should be given to the person er persons who shall for the time being be competent to appoint or convey the said hereby mortgaged premises.' I assume that the exercise of such a power need not be confined to twenty-one years after the decease of the donee; for it is not a power in the technical sense. It is not to revoke uses or to limit uses, but merely to discharge the land from the mortgagor's equity to redeem: and in a court of equity it tends to no perpetuity, for there it may at any time be put an end to by the owner of the equity which it controls."

(139) If the mortgage be by lease and release, vary the recital accordingly.

in the year

and the

day

and of interest for the same after

deemed in equity to be so limited by way of mortgage only, for securing to the said [mortgagee], his executors, administrators, and assigns, the payment of the sum of £, on the of the rate of £5 per cent. per annum, half-yearly, on the day of day of, without deduction; And by the said indenture, as a further and concurrent security for the payment of the said sum of £ and interest, power was given to the said [trustees for mortgagee], and the survivor of them, his executors and administrators, after the expiration of six calendar months from the said day of, in the year, at the request in writing of the said [mortgagee], his executors, administrators, or assigns, to sell the said hereditaments, and power was also given to the said [mortgagee], his executors, administrators, and assigns, to appoint the use of the hereditaments so sold in such manner as should be requisite or expedient for completing the sale; And by the said indenture a power was also given to the said [mortgagee], his executors, administrators, and assigns, enabling him and them, when and so often as he or they should think fit, by deed attested by one or more than one witness, to appoint any person or persons to be a trustee or trustees for the purposes of the trusts and powers thereinbefore vested in the said trustees, in the place of the trustee or trustees, or of any trustee, for the time being, (which trustee or trustees should, by the effect of such appointment, be discharged), with a declaration, that, on every such appointment and as a legal consequence thereof, the use of the fee-simple, therein before limited to the said [trustees], their heirs and assigns, should shift to and be executed in the trustees so appointed; AND WHEREAS the said sum of £ remains secured to the said [mortgagee], by the said recited indenture, but the interest thereof has been paid up to the day of the date of these presents; AND WHEREAS the said [transferee] has agreed to pay the said sum of £ to the said [mortgagee], on having the mortgage security made by the said recited indenture transferred in manner hereinafter expressed. Now THEREFORE THIS DENTURE WITNESSETH, that, in consideration of the sum of L - paid by the said [transferee] to the said [mortgagee], on the execution of these presents, The said [mortgagee] Doth The mortgagee assign and transfer unto the said [transferee], All the said

-that principal money remains due, but

that interest is paid up: -that new lender has agreed to ad

vance.

TESTATUM.

transfers the

IN

mises.

absolutely;

as to the mortgaged premises, for the residue of the term, subject

to redemption. Covenant by

the mortgagee

sum of £- secured by the said recited indenture, and the debt and interinterest henceforth to accrue due thereon, with the full benefit est, and the of the said recited security and of all other securities for the said sum and interest; Also the said messuages, lands, tene- mortgaged prements, and hereditaments so appointed by the said recited indenture as aforesaid, with their appurtenances; And all the estate, right, title, and interest of the said [mortgagee], in or to the respective premises hereby assigned: To HOLD the re- HABENDUM, spective premises hereby assigned unto the said [transferee], -as to the debt his executors, administrators, and assigns, as to the said sum of and interest, £and interest, absolutely and beneficially, and as to the said messuages, lands, tenements, and hereditaments, with their appurtenances, for the unexpired residue of the said term of 500 years, subject to the right or equity of redemption subsisting by virtue of the said recited indenture. And the said [mortgagee], for himself, his heirs, executors, and administra- against incumtors, hereby covenants with the said [transferee], his executors, brances. administrators, and assigns, that the said [mortgagee] has not done or permitted any act, matter, or thing whereby the respective premises hereinbefore assigned, or any part thereof, are, is, or may be aliened, incumbered, or prejudicially affected. And Appointment the said [transferee], in exercise of the aforesaid power given by the transto the assigns (140) of the said [mortgagee] by the said re- feree, under a cited indenture, Doth appoint the said [trustees for transferee] mortgage. to be trustees for the purposes of the trusts and powers by the said recited indenture vested in the said [trustees for mortgagee], in the place of the last-named trustees. And the said [mortgagor] hereby declares, and also for himself, his heirs, executors, and administrators, hereby covenants with the said [transferee], his executors, administrators, and assigns, and also separately with the said [trustees for transferee], their heirs and assigns, that the powers and covenants contained in the said recited indenture, shall henceforth confer upon the said [mortgagee], his executors, administrators, and assigns, and the said [trustees for transferee], their heirs and assigns, the same authorities, rights, and remedies at law and in equity, as if the said [transferee] and the said [trustees for transferee] respectively had been the original donees and covenantees. And the said [mortgagor] hereby approves of and confirms the assignment and appointment hereinbefore contained. AND THIS

(140) Ante, 144.

of new trustees

power in the

Covenant by

the mortgagor,

that the powers and covenants shall be available to the his trustees.

in the mortgage

transferee and

Approval and mortgagor of confirmation by the transfer and appointment.

FURTHER
TESTATUM.

Further charge.

Form of further charge.

Right of a mortgagee to withhold deeds.

INDENTURE FURTHER WITNESSETH, that, in consideration of the sum of £ paid by the said [transferee] to the said [mortgagor], on the execution of these presents, The said [mortgagor] hereby declares, and also for himself, his heirs, executors, and administrators, hereby covenants with the said [transferee], his executors, administrators, and assigns, that the said recited indenture, and all the provisions and covenants therein contained, shall henceforth stand as a security for, and extend to cover the principal sum of £, being the aggregate amount of the said sum of £, expressed to be secured by the same indenture, and the said sum of £- advanced on the execution of these presents, and the interest of the said sum of £- — [the aggregate amount], so as to entitle the said [mortgagee] and [mortgagor] respectively, and their respective heirs, executors, administrators, and assigns, in respect of the whole of the said sum of £— [the aggregate amount], considered as an entire debt, and the interest thereof, to the same rights and remedies, legal and equitable. IN WITNESS &c. (141).

(141) A further charge commonly assumes the shape of a covenant to pay at a given time, and declares also that the lands shall not be redeemable until satisfaction, as well of the original debt as of the further advance, without adverting to the plight of the original security, as affected by the circumstance of the day of payment therein appointed being past or not. It is conceived, however, that the further charge should assimilate the security for the new advance to the security for the original debt, and be adapted to place the parties in the same relative condition as to both.

The student will collect, from the nature of the precedents in the text, and from the discussions in the notes, that the simple mortgage by demise, once almost universal, has been generally superseded by the mortgage in fee, with power of sale. Such a power, it must be confessed, may be very vexatiously and oppressively employed. But so may the ordinary and long acknowledged right of a mortgagee to deny all access to the deeds, till the money is actually in his hands. In the recent case of Brown v. Lockart (3 Jur. 167), the Vice-Chancellor recognises this "right of the mortgagee to keep his deeds to himself-known to nobody but himself—till that lucky moment does arrive, if ever, that the mortgagor appears with the principal and interest in his hand,” adding, " and then he would not be bound to part with the deeds before he received his money-at least it must be a simultaneous transaction." It follows of course that the solicitor of a mortgagee who produces or furnishes an abstract of the deeds, without, not only obtaining his direct permission, but explaining to him the nature and reason of the right to withhold all information, incurs some responsibility.

No. 28.

CONVEYANCE, BY APPOINTMENT, in Execution of a
Power of Sale in a Mortgage. [New Form, founded

on No. 26].

THIS INDENTURE, made the—

day of

in the

year of our Lord, BETWEEN [transferee], of &c., of the Parties.

The subject of mortgages .cannot be dismissed without an observation upon the practice-the established practice, indeed, with some provincial offices of requiring the borrower to pay interest from the time when the money is engaged and ready to be advanced, or, in other words, from a period antecedent to the actual advance. The object is to protect the lender, who has engaged his money, from loss of interest in consequence of its remaining idle during the investigation of the title and the preparation of the securities. Sometimes, the money is placed to the joint account of the lender and borrower at a banking-house, or invested in Exchequer bills, which are deposited in their joint names; sometimes it remains in the order and disposition of the lender. In either way, the real character of the transaction is this, that, in consideration of a loan, the borrower engages to pay, besides the stipulated interest, an indemnification against a collateral inconvenience or loss. If the two payments, added together, may exceed £5 per cent. from the period of advance, the contract is illegal. (See Doe v. Gooch, 3 Barn. & A. 660: Fereday v. Wightwick, 1 Russ. & M. 50: Chillingworth v. Chillingworth, 8 Sim. 404). Interest can be lawfully taken only for the use of money. The joint investment does not appear to lessen the objection. It matters not that the lender is deprived, partially or even wholly, of the use of the money, if the borrower does not obtain the control over it. Till the money is placed at the absolute disposal of the borrower there is no real loan. If the lender, retaining the money, suffer it to remain idle, it must be imputed to his folly or his caution; either he will not be at the trouble, or he will not incur the risk or the expense, of a temporary investment. Weeks, months, even years, may elapse before the title can be cleared and the securities completed; if the principle be admitted, no definite limit can be fixed, while the stimulus to despatch is weakened by the stipulation for interest. But the illegality of the practice is too clear for argument. The same observations apply to the investment or retention of part of the money to be paid over when some particular defect shall be removed, or (and this is not infrequent in building transactions) to be doled out as some building or improvement on the estate advances, taking interest in the meantime from the intended borrower for the sum so invested or retained, or, in other words, present interest for the future loan.

Practice of taking interest pending the

completion of the loan.