The parties had entered into a series of agreements for loans, and partnerships. The defendants resisted a request by the plaintiff to be allowed, under the agreement, into partnership on a failure to repay the loan.
Held: The appeal succeeded. The agreements were separate, and there could be no objection that one constituted a clog on the equity of redemption.
Vaughan Williams explained: ‘I do not understand the defendant’s counsel to dispute that it is competent for a mortgagee to enter into an agreement to purchase from the mortgagor his equity of redemption. The only objection to such an agreement is, that it must not be part and parcel of the original loan or mortgage bargain. The mortgagee cannot, at the moment when he is lending his money and taking his security, enter into an agreement the effect of which would be that the mortgagor would have no equity of redemption. But there is nothing to prevent that being done which in substance and fact is subsequent to and independent of the original bargain.’
Judges:
Vaughan Williams LJ
Citations:
[1902] 1 Ch 53
Jurisdiction:
England and Wales
Cited by:
Appeal from – Reeve v Lisle and others HL 1902
In 1896 the plaintiffs agreed to lend andpound;5,000 to the defendant to be secured by a ship mortgage (executed later), requiring that if at any time during the period of two years the plaintiffs should elect to enter into partnership with 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: 21 August 2022; Ref: scu.443248