Shares in a tea company had been mortgaged to secure a loan from a broker on terms that the mortgagor would seek to ensure that the mortgagee should thereafter have sale of the company’s teas. The mortgage contained a covenant that, if the company sold its teas otherwise than through the mortgagee, the mortgagor would pay to the mortgagee an amount equivalent to the commission that he would have earned from the company as broker. It was complained that the agreement was a clog on the mortgagor’s equity of redemption.
Held: (Lord Lindley dissenting): The agreement did not fail, falling within the principle in Noakes v Rice.
Judges:
Macnaghten, Davey, Robertson, Lindley LL
Citations:
[1903] UKHL 1, [1903] AC 253
Links:
Jurisdiction:
England and Wales
Citing:
Cited – Noakes and Co Ltd v Rice HL 17-Dec-2001
A charge on a public house provided that even after repayment of the principal, the owner continued to be obliged to purchase his beer from the brewery, and that any non-payment would be charged on the property.
Held: The clauses operated as a . .
Cited by:
Explained – G and C Kreglinger v The New Patagonian Meat and Cold Storage Company HL 20-Nov-1913
Mortgagor’s collateral dvantage is not a clog
The appellant woolbrokers had lent the respondent andpound;10,000 with a floating charge over its undertaking. The loan agreement provided that, for five years, the appellants would have first refusal over all sheepskins sold by the company. The . .
Cited – Jones v Morgan CA 28-Jun-2001
The claimant appealed against an order refusing him enforcement an agreement for the purchase of a one half share in a property. The judge had found the agreement to be unconscionable.
Held: The appeal was dismissed. The judge had wrongly . .
Lists of cited by and citing cases may be incomplete.
Equity, Contract
Updated: 13 July 2022; Ref: scu.263838