It is an established rule of equity, that a third mortgagee having lent his money, without knowing there was a second mortgage upon the same estate, may, by paying off the first incumbrancer, and taking an assignment of his interest to himself, hold the estate against the second mortgagee, till he shall be paid what is due to him upon both mortgages. The principle upon which this doctrine was first established, and has ever since prevailed, is that the third mortgagee having innocently lent his money, without knowing that the second had any claim upon the estate, has in conscience as good a right to be paid the whole money he has lent, as the second mortgagee has to the payment of what he advanced ; and having by the assignment of the first mortgage got a right to hold the estate absolutely at law, and having possession of the title deeds, without which the estate cannot be sold, a Court of Conscience ought not to take from him his legal protection of an honest debt.
Citations:
[1764] EngR 26, (1764) 5 Bro PC 292, (1764) 2 ER 686
Links:
Land, Equity
Updated: 02 May 2022; Ref: scu.375235
