A lender M advanced pounds 1,200 to pay off an existing mortgage held by T over a property owned by the plaintiff. M made the advance on the basis of certain misleading representations and non-disclosures by the plaintiff’s husband. M was told that he would receive a transfer of T’s mortgage. pounds 1,000 of the advance was applied in reduction of T’s mortgage. T’s mortgage was secured over two properties. The plaintiff was subrogated to the prior mortgage because otherwise the wife would have been unjustly enriched by the discharge of the debt which it secured.
Held: The charge on both properties to the extent of pounds 1,000 was kept alive in equity in favour of M, so far as that could be done without prejudicing T or the plaintiff, with whom M did not deal. T was not prejudiced as the balance of his mortgage debt had priority over M’s charge. The plaintiff was not prejudiced so long as no extra costs were thrown on the mortgaged properties by reason of the original mortgage debt being divided between T and M.
Judges:
Romer J
Citations:
[1899] 1 Ch 353
Jurisdiction:
England and Wales
Cited by:
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 . .
Cited – Lowick Rose Llp v Swynson Ltd and Another SC 11-Apr-2017
Losses arose from the misvaluation of a company before its purchase. The respondent had funded the purchase, relying upon a valuation by the predecessor of the appellant firm of accountants. Further advances had been made when the true situation was . .
Lists of cited by and citing cases may be incomplete.
Equity
Updated: 25 November 2022; Ref: scu.592219
