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in the event of their being no evidence to the contrary, that the mortgagor's solicitor must be considered as having acted for both parties.
With respect to the second question, Kindersley, V.C., observed, that no doubt the rule was, that where there was a subsequent mortgagee, though he had no notice of the prior mortgage, if he did not get in the title-deeds, then the court would consider that tantamount to a fraud, and that he had constructive notice of the prior mortgage; but in the present case his Honour thought there was sufficient reason for Browne not obtaining the titledeeds. “It appears that he did ask for them,” remarked the Vice-Chancellor ; "in fact, they say he asked for them too much, and therefore they say he is charged with negligence in not making his requisitions more effectual; but he is a young man, the articled clerk of the mortgagor, who married his mother, and the stepfather says, 'You shall have the deeds as soon as I can get them, and he further says, you have got the assignment. There is nothing in this to make the young man guilty of fraud, or to shew that he was assisting Pemberton to commit a fraud. I cannot in this case come to the conclusion, that there is any such negligence or omission with regard to not procuring the title-deeds, as to lead me to say that the defendant is not entitled to his security."
In deciding this question, the Lord Chancellor was governed by Hewitt v. Loosemore and the earlier cases. Some of these cases we will now briefly advert to. Buller, J., in Goodtitle v. Morgan (1 T. R., 762), observed that it was an established rule in equity, that a second mortgagee who had the title-deeds without notice of any prior incumbrance should be preferred, because, if a mortgagee lend money upon mortgage, without taking thé title-deeds, he enables the mortgagor to commit a fraud. But Lord Chancellor Thurlow, in Tourle v. Rund (2 Bro. C.C. 652), remarked that it was to be wished that the cases in the Court of Chancery on which this opinion was grounded had been named, , for he did not conceive that a first mortgagee not taking the deeds was alone sufficient to postpone him; and in Penner v. Jemmatt (2 Bro. C.C. 652, note), Lord Thurlow held that there must be a voluntary leaving of the deeds, to entitle the second mortgagee to have the prior mortgage postponed. In Evans v. Bicknell (6 Ves., 183), Lord Eldon observed that Mr. Justice Buller's proposition was not true, but did not wonder that it had been so stated; for in Ryall v. Rolle (1 Ves., 360; 1 Atk., 168), it is so stated by Mr. Justice Burnet, and without observation by the Lord Chancellor (Hardwicke), or the other learned persons (Lee, L. C. J., and Parker, L. C. B.), by whom the Chancellor was assisted, as being contrary to the law of the Court of Chancery.-(See also 4 Madd. 135.)
The general rule that nothing but fraud, or gross, or voluntary negligence in leaving title-deeds, will oust the priority of a legal mortgagee, was established in Plumb v. Fluitt (2 Anstr., 432). In that case, title-deeds were deposited with A. as a security for money; the property was then conveyed to B. by way of mort- . gage
without notice of A.'s security. It came out in evidence that, on the mortgage being proposed, B. sent for the title-deeds; the mortgagor then said he could not give them to him, but promised to bring them in a few days. When the mortgage was to be executed, the mortgagor again excused himself for not bringing the title-deeds with him, but promised to send them next day, and two days after the mortgage was executed, he informed B. of A.'s security. Eyre, L. C. B., held that B. had not been guilty of such gross and voluntary negligence as would postpone him to A.
The doctrine established in Plumb v. Fluitt, was reasserted by Lord Eldon in Evans v. Bicknell (6 Ves., 190), and in Martinez v. Cooper (2 Russ., 98). It was assented to by Sir Wm. Grant in Barnett v. Weston (12 Ves., 133), and apparently by Sir John Leach in Harper v. Faulder (4 Madd., 138), who, however, did not there consider himself called upon to decide the general question ; it was followed by Lord Langdale in Farrow v. Rees (21 Beav., 18), and by Sir James Wigram and Lord Cottenham in Allen v. Wright (5 Hare, 272, and 11 Jur., 527; 16 L. J. Ch., 370.)
In Hewitt v. Loosemore, Turner, V.C., after referring to Plumb v. Fluitt, and the subsequent cases mentioned above, remarked : - It was said in the argument that the cases to which I have referred could not be reconciled with the decision in Jackson v. Rowe (2 S. and S., 472), with what fell froin Lord Cottenham in Dryden v. Frost (3 My. and Cr., 673), and from Lord Langdale in Tylee v. Webb (6 Beav., 552), and with the determination of the late Vice-Chancellor of England in Worthington v. Morgan (16 Sim., 547). But upon examining those cases, I do not think they will be found inconsistent with Plumb v. Fluitt."
In Jackson v. Rowe, Mrs Jackson, under the settlement made on the marriage of her parents, and an appointment made after her father's death by her mother, was entitled, subject to the life-interest of her mother, to an estate in fee. The title-deeds of the estate were kept by Mrs. Jackson's mother, who married a second time, and, pretending to be seized in fee, conveyed the estate in consideration of marriage to her second husband in fee. Here it was held that the second husband, like every other purchaser, was bound to use due diligence in the investigation of the title before he accepted the conveyance of the estate. With due diligence he must have discovered that his intended wife had only a life estate. " In Jackson v. Rowe,” said Turner, V.C. (9 Hare 457), “the question was not whether a prior equitable title could prevail against a subsequent legal one, but whether there was a good equitable defence against a prior legal title; and it did not appear that any inquiry whatever had been made about the title-deeds.”
In Dryden v. Frost, Lord Cottenham observed, that “John Frost, the mortgagee, was in this case taking the title from a purchaser who was not in possession of the title-deeds. They were in the possession of the plaintiff, a circumstance which, according to the authority of Hiern v. Mill (13 Ves., 112), was of itself sufficient notice of the title of the party in possession of them.” The facts of the case of Dryden v. Frost do not appear from the report; but the facts in Hiern v. Mill were, that a purchaser for valuable consideration, though apprised that the title-deeds were in the hands of a third party, did not choose to inquire of him whether he had a claim upon the estate; and as Lord Cottenham, in Dryden v. Frost, referred to Hiern v. Mill as an authority, it is to be assumed that Frost, the mortgagee, had notice that the deeds were in the hands of Dryden, the plaintiff, “in which case,” said Turner, V.C., in Hewitt v. Loosemore, “ both according to Hiern v. Mill, and Birch v. Ellames (2 Aust., 427), and with reference to the doctrine of the court as to estates in the possession of tenants, he was bound to make further inquiry."
In Tylee v. Webb, Robert Webb, a copyholder, deposited the copy of the Court roll, shewing his admittance to the property in question, with Messrs. Tylee, as a security for money. Upon the death of Robert Webb, Thomas Webb, his son, was admitted tenant of the estate, and received a copy of the roll, dated 7th Nov., 1833, stating that Thomas Webb had been admitted as the only son and heir of Robert Webb, who held by copy of Court roll, dated 18th Dec., 1829. The copy of the 7th Nov., 1833, was deposited by Thomas Webb with Hinton, as a security for money. Lord Langdale said, “I incline to think that Hinton, who knew that Thomas Webb had been admitted only in his character of heir of Robert Webb, and that Robert Webb had been admitted under copy of Court roll, dated 18th Dec., 1829, must be deemed to have known that Robert Webb, having that copy of Court roll, might have deposited it so as to create an equitable charge upon the estate, and consequently ought to have required its production before he advanced his money." But as was observed by Turner, V.C., in Hewitt v. Loosemore, there was no question in Tylee v. Webb as to the legal estate. Messrs. Tylee and Hinton were both mere equitable mortgagees by deposit.
In Worthington v. Morgan, Corbett agreed to purchase an estate for £1400, of which £400 was to be paid on the completion of the purchase, and the residue to be secured by a mortgage of the estate agreed to be purchased. The estate was conveyed to Corbett, who paid £400 as agreed, but neglected to execute any mortgage to secure the residue of the purchase-money. Neither the title-deeds nor the conveyance to Corbett were delivered to him by the vendors. After a lapse of three years, a mortgage was executed by Corbett to the plaintiffs, his vendors ; but in the interval he had mortgaged the estate to Morgan without the knowledge of the plaintiffs. It was admitted that neither Morgan, nor any person in his behalf, investigated the title to the estate, or required to see the title-deeds or the conveyance to Corbett.
The Vice-Chancellor of England remarked, that he entirely acquiesced in what was said by the Lord Chancellor in Allen v. Knight, but the case was quite different from that. The Vice-Chancellor held that the lien of the plaintiff's was unaffected by Morgan's mortgage, on the ground that it was the duty of Morgan to ask for the deeds.
“The law, therefore, as I collect it from the authorities," said V. C. Turner in Hewitt v. Loosemore, “stands thus :—That a legal mortgagee is not to be postponed to a prior equitable one, upon the ground of his not having got in the title-deeds, unless there be fraud, or gross and wilful negligence to the mortgagee, if he has bona fide inquired for the deeds, and a reasonable excuse has been given for the non-delivery of them; but that the court will impute fraud, or gross and wilful negligence, to the mortgagee if he omits all inquiry as to the deeds. And I think there is much principle both in the rule and the distinctions upon it. When this court is called upon to postpone a legal mortgagee, its powers are invoked to take away a legal right; and I see no ground which can justify it in doing so, except fraud, or gross and wilful negligence, which in the eye of this court amounts to fraud; and I think that, in transactions of sale and mortgage of estates, if there be no inquiry as to the titledeeds, which constitute the sole evidence of the title to such property, the court is justified in assuming that the purchaser or mortgagee has abstained from making the inquiry, from a suspicion that his title would be affected if it was made, and is therefore bound to impute to him the knowledge which the inquiry, if made, would have imparted. But I think, that where bona fide inquiry is made, and a reasonable excuse given, there is no ground for imputing the suspicion, or the notice which is consequent upon it."
In Hewitt v. Loosemore, the facts were, that John Loosemore, the legal mortgagee, who was a farmer, unacquainted with legal VOL. VII. NO. XIV.
formis, upon the indenture of mortgage being handed to him, inquired of Robert Loosemore, the mortgagor, whether the lease ought not to be delivered to him as well. Robert Loosemore replied that it should ; but that, as he was rather busy then, he would look for it, and give it to John when he next came to market.
Turner, V.C., applying the principles he had enunciated to this particular case, was of opinion that a sufficient case for postponing John Loosemore had not been made out.
Lord Chelmsford, in his judgment in the case of Espin v. Pemberton, observed that it was said that the doctrine thus laid down by Turner, V.C., was new, and that the decision had not given satisfaction to the profession; but Lord Chelmsford thought that the judgment was consonant with the prior decisions. His lordship then said—“That the inquiry made by Browne precluded the possibility of supposing that he abstained from all inquiry for fear of hearing something adverse to the title, and the answer which he received was a sufficient excuse to induce him not to prosecute his inquiries further. The case, indeed, bears a singular resemblance in all respects to the case of Plumb v. Fluitt, which has been followed in the various cases cited in Hewilt v. Loosemore. It is said that this case is of great importance to the commercial world, and that the doctrine which it asserts will alarm bankers and others who have advanced their money upon the deposit of deeds, and that they will be rendered liable to have their securities affected by secret assignments; but the only effect of such a doctrine, if it were new, would be to prevent persons obtaining advances of money with such facility upon the deposit of their deeds, and whether any great mischief would arise from a check being put upon equitable mortgages of this description may be extremely questionable. The law, however, has been settled for a great number of years, at least from the time of Plumb v. Fluitt, which is now sixty years ago, and it has not been found that it has rendered persons unwilling to advance money upon such securities. But considerations such as these can have no effect, unless to prevent any new rule of law being laid down; and, whatever the consequences may be, I am bound by the prior decisions, and I am only following the uniform course of them when I arrive at the conclusion, that there is no such gross neglect on the part of Browne in not pursuing the inquiry he had made, as would induce the presumption of notice of the plaintiff's incumbrance.”
In Espin v. Pemberton, no reference was made to the case of Atterbury v. Wallis (25 L. J., ch. 792), in which the facts were as follows:-In 1835 Parsons conveyed to Lampray, a solicitor, hereditaments in Warwick and other hereditaments, by way of