The wife owned a Bristol property and a Cardiff property subject to a andpound;450 charge in favour of a bank with whom the title deeds had been deposited. The husband asked the plaintiff to lend him andpound;450 to pay off the mortgage. The plaintiff thought that the Bristol property belonged to the husband and did not know of the Cardiff property. He agreed to advance the money on having a legal mortgage for andpound;300 on the Bristol property and a guarantee of andpound;150 by the husband’s solicitor who was to hold the deeds for the plaintiff. The wife knew nothing of the transaction. The money was paid, the charge to the bank discharged and the deeds of the Bristol property held by the solicitor as stakeholder. The wife refused to execute a mortgage in favour of the plaintiff. He sued the wife and her husband and the solicitor for a declaration that he was entitled to a charge on the Bristol property [for] andpound;450 and interest.
Held: The court referred to ‘ . . the well-known equitable doctrine that if a stranger pays off a mortgage on an estate he presumably does not intend to discharge that mortgage, but to keep it alive for his own benefit.’ It must be presumed that the plaintiff wanted to keep the bank’s charge alive in his own favour, that the fact that the wife had not requested the plaintiff to make the payment and did not know of the transaction was immaterial, that the fact that he intended to take a different security did not affect the question, and that he was entitled to a charge on the Bristol property for andpound;450 and interest.’
 Ch 277
England and Wales
- Cited – Ghana Commercial Bank v Chandiram PC 1960
The bank made an advance to the owner of property in Accra which was used to pay off his indebtedness to Barclays (DC and O) Ltd, secured by an equitable mortgage. The owner executed a legal mortgage in favour of the Ghana Bank, but this was . .
 AC 732
- Cited – Castle Phillips Finance v Piddington CA 1995
The wife charged the matrimonial home to Lloyds to secure the husband’s indebtedness. The husband subsequently agreed with Barclays for the indebtedness to be refinanced. The husband and an accomplice forged her signature on a transfer of the . .
 1 FLR 783
- Cited – UCB Group Ltd v Hedworth CA 4-Dec-2003
The defendant challenged the claimant’s right to possession under a legal charge. She appealed a finding that she had not established the undue influence of her husband, a solicitor.
Held: A lender who received a voidable security was entitled . .
 EWCA Civ 1717, Times 09-Jan-04, Gazette 29-Jan-04
- Cited – Bank of Cyprus UK Ltd v Menelaou SC 4-Nov-2015
The bank customers, now appellants, redeemed a mortgage over their property, and the property was transferred to family members, who in turn borrowed from the same lender. A bank employee simply changed the name on the mortgage. This was ineffective . .
 UKSC 66,  3 WLR 1334,  AC 176,  WLR(D) 438, UKSC 2013/0171
These lists may be incomplete.
Updated: 02 December 2020; Ref: scu.190509