The mortgagor of a quarry defaulted, and the mortgagees took possession. They were unable to sell the quarry, but formed a company which bought the quarry at a proper value. The mortgagor sought to set aside the sale.
Held: A mortgagee in possession exercises a personal right primarily in his own interests as a mortgagee, The self-dealing rule applies in that a mortgagee cannot exercise the power to sell to himself or to a nominee or to a company of which he is the sole director and shareholder, but he can sell to a company in which he has a significant interest but the onus lies on him to justify the terms of sale. The mortgagees had shown that the sale was made in good faith, and at a proper price; with the consequence that the sale stood.
Citations:
(1888) 40 Ch D 395
Jurisdiction:
England and Wales
Cited by:
Cited – Newport Farm Ltd and 22 others v Damesh Holdings Ltd and others PC 7-Jul-2003
(New Zealand) The clamaints alleged that mortgagees had failed to take proper steps to obtain the best price on selling their properties as mortagees. The common law duty had been encapsulated in the 1952 Act. Here, however the landowners had . .
Cited – Newgate Stud Company, Newgate Stud Farm Llc v Penfold, Penfold Bloodstock Limited ChD 21-Dec-2004
The claimants sought damages from the defendant. He had been employed to manage their horse-racing activities, and it was alleged that he had made secret profits. The defendant denied any dishonesty, saying all matters were known to the deceased . .
Cited – Meretz Investments Nv and Another v ACP Ltd and others ChD 30-Jan-2006
The applicant challenged the exercise of a power of sale under a mortgage, saying that the mortgagee’s purposes included purposes not those under the mortgage. The parties had been involved in an attempted development of a penthouse.
Held: The . .
Lists of cited by and citing cases may be incomplete.
Land, Company
Updated: 05 June 2022; Ref: scu.184562
