A farm in Yorkshire had been charged by O first to A and then to the plaintiff, and the charges registered under the Yorkshire Registry Acts. An attempt was made to sell of part of the land by o to his daughter to repay some of the money. She sought, through her solicitor W, a contributor to repay the first loan. Parties were unaware of the first charge. Completion and registration took place. A was repaid by the contributor who now said that instead of the charge being discharged, he now stood in A’s stead with a first mortgage.
Held: He was not entitled to priority. There had been a common mistake, induced by O, and the deeds as framed, and with his involvement, did not represent the intentions of the parties. The question of merger must, therefore, be decided according to the doctrines of equity, and the principle by which the Court of Equity is guided is the intention.
A purchaser from a mortgagor and a first mortgagee can always, if he chooses, keep the first mortgage alive and so protect himself against subsequent incumbrances and whether or not he had notice.
Judges:
Viscount Haldane LC
Citations:
[1914] AC 132, 83 LJ Ch 349, 110 LT 434, 58 Sol Jo 218
Jurisdiction:
England and Wales
Cited by:
Cited – Paragon Finance Plc v Pender and Another CA 27-Jun-2005
The defendants had purchased their property from the local authority with the support of a loan from the claimants. The defendants fell into arrears but now sought to resist possession on the basis that the claimant, in securitising their portfolio . .
Lists of cited by and citing cases may be incomplete.
Land, Equity
Updated: 07 May 2022; Ref: scu.229647