[47]

Manx Mortgages.

The system of mortgaging in the Isle of Man is altogether unique, and differs as well in the form of the instrument of conveyance as in its effects and remedies from any practised in any other part of the British Dominions.

In order to explain the nature and form of a modern Manx mortgagee it will be necessary to refer shortly to the ancient practice of the Island.

In England a mortgage is a conveyance of the fee simple to the mortgage and his heirs subject to a condition that on repayment on a certain day the conveyance shall be void or that the lands shall be reconveyed to the mortgager or his heirs.

In default of payment on the day fixed, the Estate at law vests absolutely in fee in the mortgagee, the benefit of the condition being lost to the mortgagor except in equity, which will allow him afterwards to redeem. The Estate of the mortgagor is therefore under such circumstances a mere equity of redemption, the mortgagee being in the eye of the law the complete owner.

A mortgagor conveying the fee simple to the mortgagee is unknown in the Isle of Man. [note 1]

In ancient times a Manx mortgage was a simple conveyance or demise in consideration of a loan to hold to the mortgagee, his executors, admin- [48] istrators, and assigns, until repayment of the loan. Such a conveyance in effect created in the mortgagee an Estate for years only, id certum est quod certum reddi potest. The Estate of the mortgagor being subsequently a legal reversion instead of an equity of redemption. According to the almost universal practice prevailing before the Act of Settlement, the mortgagee actualIy entered into possession of the land, which he was entitled to hold till repayment Prior to the Usury Acts of 1649 and 1691, he continued to enjoy the whole profits, in lieu of interest, without account, until the mortgagor should repay the principal. For this reason mortgages of whole Estates were then very rare in the Island, the practice being to give in security as small a portion as the mortgagee would agree to accept, so that the profits should be about equal to a fair interest. After the passing of the Usury Acts the mortgagee was held liable to account for the profits, so that if after the latter of these Acts they exceeded the rate of six per cent the excess was applied towards payment of the principal. As these mortgages rarely if ever contained any personal covenant to pay either principal or interest the mortgagee was held entitled only to the security, so that if the profits of the land should be only about equal to the interest, the mortgagee not being able to foreclose except by a suit in equity to foreclose or sell, had no remedy but to hold the land until the mortgagor thought proper to redeem, which he might do at any time he thought proper.

[49] From these remarks it will already have been perceived by the legal reader that an ancient Manx mortgage was almost identical with the mortgage, now obsolete, formerly known in England by the description of a "Welsh Mortgage."

This system not providing any mode of compelling payment by foreclosure except under a decree in equity, being obviously unsatisfactory, a remedy was provided for the mortgagee by the Act of Settlement in 1704, [note 2] by which it was enacted and provided that any mortgage of lands which should not be redeemed by the mortgagor to his own proper use within five years from the commencement of the mortgage should be reputed an alienation, and that the mortgagee should be admitted tenant and his name entered on the rolls, and an alienation fine should be payable provided that the mortgagor should have the power of redemption remaining in him, and should be restored to possession by law or order of the Chancery Court so that the same be done within 21 years from the date of the mortgage and not otherwise.

After this Act the system of giving actual possession to the mortgagee went out of use and a clause was usually inserted in the mortgage deed providing that if the mortgagor punctually paid the annual interest he should be entitled to retain possession. In some cases the mortgages were for [50] terms of five years, and from year to year afterwards until payment with a clause reserving possession until default made by the mortgagor. This practice continued up to 1835, shortly before which the whole system of Manx mortgaging was the subject of much investigation and decision by the Privy Council in the appeal case of Christian v. Goldie. [note 3] An explanation of this case will afford a fair view of the practice as it prevailed up to the year 1835.

The case arose under two deeds of mortgage, both similar in terms. The fol1owing is a copy of one of them:

"Know all men by these presents that I, John Christian of the town of Ramsey, with the consent of Catherine my wife, divers good causes me hereunto moving, but more especially for and in consideration of the sum of six hundred pounds, lawful money of Great Britain, to me paid at by and from the hands of John Taubman of the Nunnery Esquire, have given granted demised and mortgaged all those lands and premises situate near the town of Ramsey, aforesaid, and called and commonly known by the name of the Flatt, with the Brewery, Dwelling-houses, Offices and Buildings thereon erected, adjoining the public road leading to the said town on the East, Milntown on the West and North, and Cloughhane on the South, and of such annual chief rent as is or shaH be settled thereon. To have and to hold unto the said John Taubman, his executors, administrators, and assigns, until the said principal sum with interest out of the same at and after the rate of six pounds out of one hundred pounds by the year, and all costs and charges attending tbe same, be fully paid and satisfied: Provided nevertheless, and it is hereby declared to be the true intent and meaning hereof, and, of the parties hereto, that it shall and may be lawful for the said John [51] Chrlstlan, his heirs, and assigns, to hold the possession of the said lands and premises, paying the annual interest of the said sum of six hundred pounds and that whenever, and so often as the said interest shall be paid on the expiration, or within two months after the expiration of each year, that then the said interest shall be computed after the rate of five pounds out of one hundred pounds by the year. And for the true and faithful performance hereof, I do hereby bind and oblige myself, my heirs, executors, administrators, and assigns. in and under the penalty and forfeiture of twelve hundred pounds currency, aforesaid, to be levied and paid according to law.

As witness my name this 22nd November, 1806".

The form of this mortgage was that which was then, and since 1703 had been usual. Previous to that period the only difference in form was the omission of the clause in italics.

The suit in question arose under the following circumstances. After the date of the mortgage, Christian, the mortgagor, continued in possession of the mortgaged lands) and made large payments of interest, generally by giving additional securities on the same and other lands, but did not redeem within twenty-one years from tne date of the mortgage, which period expired on the 22nd November, 1827, on which day the whole of the principal and some arrears of interest remained due. Under these circumstances Goldie, as executor of Taubman, the mortgagee, claimed the lands as absolutely lapsed, both at law and in equity, and obtained a summary order of the Deemster's Court to dispossess Christian, who was still in possession. Goldie thereupon entered into actual possession of [52] the whole property except the mansion house, of which Christian took a letting from Goldie. Both before, and for some time after the lapse, Christian had been making ineffectual attempts to raise the mortgage money to redeem, but was unable to do so. On one occasion the only obstacle was created by a doubt, raised by an English solicitor, as to Goldie's title to receive the mortgage money, in consequence of the probate (according to the Manx form) being granted to him, instead of to his wife, the executrix named in Taubman's will. Christian dying in 1831, his son and heir-at-law, the complainant in the suit, offered to redeem by payment of principal and interest, and this being refused by Goldie, Christian in 1834 filed his bill in the Insular Chancery to be allowed to redeem. He grounded his case on the argument that the Act of Settlement must be construed with reference to the only system of mortgaging existing at its date or previously, according to which system the actual possession of the land was given to the mortgagee, under which circumstances, if not redeemed by the mortgagor to his own use within twenty-one years the mortgage by the Act became lapsed. He denied that the Act ever contemplated the lapse of land which had not been out of the mortgagor's possession. The twenty-one years within the meaning of the Act could only commence not from the date of the deed or bill of mortgage, but from the date of the actual mortgage or delivering of the land itself to the mortgagee. The words of the Act "redeem to his own use" showed the intention of the framers of the Act, who contemplated the lands being in [53] possession of the other party, and this distinction was supported by the distinction evidently made by the Act in the use of the words "mortgage" and "bill of mortgage," the former referring to the actual delivery of the land, and the latter to the deed only. By the terms of the Act the twenty-one years must be reckoned from the actual mortgage, and not from the date of the deed of mortgage. If the construction placed on the Act by Goldie was correct the largest estate in the Island, if mortgaged for twenty shillings would, notwithstanding the payment of interest during the whole term, be absolutely and irredeemably lapsed if one shilling of the principal happened to remain unpaid one day after the expiration of the twenty-one years.

The construction given to the Act by Goldie, and which was in accordance with former practice and decisions of our Courts, was affirmed by the Insular Court, which, on the hearing of the case on the 1st March 1836, dismissed the complainant's bill without costs. On application the Court gave the grounds of its judgment as follows:

1st.—Inasmuch as mortgages similar to those which are the subject of the present suit were known at the time the Act of Settlement was passed, the words in the Act "from the date of the said mortgages," mean according to the invariable uniform construction of them; the date on which the conveyance deed or bill of mortgage is executed, and perfected whether the mortgagor remained afterwards in the possession of the mortgaged premises or not. If he does remain in possession he is considered in law tenant to the [54] mortgagee, and as such is liable to be ejected upon any breach of the covenants upon which he holds possession.

The Act of Settlement is primarily a contract between the Lord and his tenants to quiet them in the possession of th€ir lands, and to secure to him the payment of the rents and fines agreed upon, and in ascertaining its true meaning it must be put to this test.

No alienation fine is payable on a mortgage, but one third of the fine imposed in 1643, however often the mortgage may be assigned or devised, and the name of the mortgagee being once entered on the Court Rolls can never be withdrawn until the mortgage be cancelled.

Under such mortgages as those granted to Major Taubman, a mortgagee could not take possession of the mortgaged premises so long as the interest was continued to be paid. It follows that no alienation fine should be paid but on the mortgagees entry on the Court Rolls, unless the heirs or assigns, of the mortgagor, chose to pay off the mortgage which it may fairly be presumed they never would be inclined to do especially if the mortgage was made for a small sum of money bearing interest at a low rate. The Legislature never could have meant to practice such a fraud on the Earl of Derby, even if it could be supposed he would have permitted them to do so.

The Court is of opinion that mortgages were understood in the same sense in the year 1704, as they were in the year 1777, when the Act of Settlement was re-enacted and confirmed and as they were understood in the year 1835, when an Act was passed authorizing the mortgagee to sue out execution and sell the mortgaged premises at the end of twenty-one years from the date of the mortgage, otherwise he never could compel the mortgagor to pay the principal money under the covenants of such a deed, the interest being paid.

2nd.—The penalty for the non-entry of the mortgagee at the end of five years from the date of the mortgage [55] is declared by the Act of Sottlement. This point was raised and decided in the case of Brew v. Drinkwater. [note 4]. The words of the statute are "that the mortgagee is to be entered at the end of five years from the commencement of the mortgage." If the mortgagor remained in possession under any agreement with the mortgagee, and the doctrine urged for the complainant be correct, there would be no commencement of the mortgage, and no alienation fine payable. On the other hand if the mortgagee were entered on the Court Roll, and were kept out of the mortgaged premises by the annual payment of the interest money, there could be no end to the mortgage as before shown, and no further alienation fine payable.

3rd.—The defendant Goldie's and Captain Christian's acts respecting these mortgages, have not been such that the Court can gather from them any grounds to let the complainant into the redemption of the premises, without shaking the foundation on which the former decisions of the Court are based, and disturbing the titles of the present possessors of property under such decisions, and under the operation of the Act of Settlement.

4th.—With regard to the lands North and East of the road, in the possession of which the complainants have not been disturbed, there is no case made out or relief prayed for which the Court can deal with.

5th.—Subsequent mortgages for valuable consideration can in no way affect, invalidate, or destroy former mortgages.

6th.—The practice which has long ceased of instituting suits in the name of the Attorney-General, for penalties in deeds, was in the nature of a complaint for a breach of contract, and the Court dealt with the penalty so as to redress the aggrieved party, as a Jury would by a more tedious process, assess damages. The practice had no more reference to mortgages than to other contracts.

[56] Lord Brougham, in pronouncing the judgment of the Privy Council, affirming the judgment of the Insular Court, gave the following reasons:

This is an appeal from a judgment pronounced in the Isle of Man, which proceeded on the supposition of a species of statutory limitation to the right of a mortagor in his equity of redemption, whereby that equity of redemption is barred by the lapse of twenty-one years, unless that lapse is satisfactorily accounted for. The question arose \vhether thefifth proposal in tl1e Act of 1703 (a species of law which was then passed) amounts to a bar of the limitation of the equity of redemption; that is to say whether there is this peculiarity in the law touching mortgages in the Isle of Man, that a mortagagor, after the lapse of twenty-one years unaccounted for by absence from the Island, non-sane mind, or any of those causes which are the ordinary bars to the effect of limitation, shall lose his equity of redemption and the mortgaged premises be absolutely vested without remedy in the mortgagee.

It appears upon a view of the argument at the Bar and the search which we have had an opportunity indirectly of making into precedents, while the argument proceeded and since, that the judgment of the Court below was well founded. ,At the same time as the la,,," there so materially differs from any ,vhich we ha\"e in England upon this subject, it ,vas a point of great importance to be carefully looked into. It appeared to us to be important, before we pronounced our finaLjudgment, now for the first time caJled upon to sanction the law as it is understood to be received on the Island, that we should be thoroughiy satisfied of the law and practice of the Island iIl this respect. Accordingly a few days havinginterposed, their Lordships have examined the case and the mortgage deeds, and have also looked into the cases of Brew v. Drinkwater (note 5] and Cain v. Cain, [note 6] referred to in the argument, [57] exemplified copies of the judgment in which have been handed to us. We have also examined precedents of mortgages and are of opinion that the law as assumed by the judgment, and as contended for on the part of the respondents, is the law of the Island, that the mortgagor is barred by the lapse of twenty-one years and that the judgment in the respondent's favour is well pronounced.

This law appears to have been introduced as one of many proposals in the Act termed the Act of Settlement of the 6th of June 1703-1704. The principal object of the Act and particularly of the 5th proposal, it cannot be denied, was not specifically to establish any law touching the real property of the Island generally, or to establish any statutory limitation with respect to the mortgagor and mortgagee but to secure the relative right of the Lord and his tenants. The scope of part of the 5th proposal as it is called, appears to have been something in the nature of a treaty confirmed by Parliament making the law binding upon these parties. The end proposed evidently was to secure the payment of the Lord's dues, nothwithstanding a conveyance by way of mortgage that appears to have been the primary object, but the object and view of the legislature is not the only thing which is to be taken into account by Courts of Justice in construing what the Legislature has actually done, could we know exactly what it meant, or gather from the preamable the very object it had in view, if on considering the terms used we found that instead of merely accomplishing that particular object, a much larger one was accomplished, it would not do to limit the construction of the expressions and the operation of the enactment by the words ofthe preamble. The preamble may be perfectly clear, may leave no doubt whatever of the intention, but if it is equally clear that more has been done than was meant to be done, shall we say, that because it is not included in the preamble, that was not done which has been accomplished?

According to all rules of construction if any ambiguity hangs over the enacting part, resort is had to the preamble and finding from the preamble what the intention of that matter was, you then construe the enacting part, which but [58] for that would be ambiguous, giving to it that meaning which the preamble sanctions. But when there is no doubt whatever in the enactments the preamble is not to be left to control the words and to confine their operations if they plainly and without any implication by direct meaning and intendment give to the section a larger scope.

This is the rule with respect to all Acts of Parliament. There are various instances perfectly well known where the legislature has enacted provisions to which no reference is made in the preamble. There are also cases where penal enactments have been intended to apply to one class ofthe community, but by the mode in which they have been enacted they have been applied to another. But still though that is seen when these enactments come under the view of Courts of Justice they must nevertheless give them the legal intendment and assume the legislature to have meant what they have actually said. Now with these observations we proceed to consider the fifth proposal. The 1st part relates to the duties of the Lord and the tenant. The 2nd part relates to the mortgagor and proceeds thus: "Provided nevertheless that the mortgagor shall have the power of liberty of redemption still remaining in him, and is to be restored to the possession of the premises by law or order of the Court of Chancery as the matter will appear in equity, so that the same be done within the space of one and twenty years" not from possession but from the date of the said mortgage and lest there should be any doubt and not otherwise. And that all bills of mortgage already made or hereafter to be made shall be entered into the Records within six months after the passing of the said proposals into a law, or within six months after such bills of mortgage were executed, otherwise such bills to be of no effect in the law. Now this is quite clear:mdash; Whatever we may think of the intention we can have no doubt what was done. But what has been the understanding of the Courts, and the rule of practice for the course of upwards of a century, nearly a century and a half, viz., from 1704 down to the present time? We have been referred. to the case of Brew v. Drinkwater of which an abstract has been furnished us. In that case there [59] was a plea of limitation of 21 years, a replication was filed and no issue taken upon the plea; but the Court decided for the plea, that is to say they decided that it was a good bar. Now the Court is bound not to give judgment for a bad plea even though no issue be taken upon it. If anyone in this country were to plead non assumpsit infra sex menses can any one doubt that it would be held void, that it would not be permitted to stand for a moment? Here the Court admitted the plea and decided the case upon it.

It appears from this and another case of Woods v. Quayle, which we have looked into where the bill was dismissed with costs, that in all these cases the mortgage is like other mortgages to A. B. and his executors and assigns (without heirs) till paid within one and twenty years. These words clearly show that they could not go beyond that; they obtain possession and they obtain judgment, and that becomes an absolute possession, and then there are conveyances and it is no longer executors and assigns, but heirs and assigns in the conveyance.

But the language in which these cases are entered in the Court below shows this to be the every day practice of the Court below; thus in Cain v. Cain in the year 1816 the entry is in this form:— "Mortgage granted 25th February, 1793, to John Cain, and it was agreed between the parties, who are brothers, that defendant should pay off said mortgage and take a new security for that amount. On 4th January, 1814, the defendant took an assignment of the Deed instead of paying it off, and now wished to take advantage of the lapse." Now whoever heard of a lapse in the Court of Chancery here, of the lapse of a mortgage? There is nothing of the kind, but in that Island there appears to be nothing more clearly known. It is as well known there as a lease and re-lease on the law of landlord and tenant is known here, that the estate lapses, that the interest passes into the hands of the mortgagee upon the expiration of the twenty-one years.

Upon the whole therefore we have no doubt that the law is as it is assumed in the judgment of the Court [60] below, and the argument by the leamed counsel for the respondent; and this judgment must be affirmed, but as it is a case of the first impression, never having been brought here before, we do not think our affirmance of the judgment ought to be with costs.

From this decision it will be seen that the estate of the mortgagee, originally a term of years, was by operation of the Statute converted into an absolute unredeemable fee simple if not redeemed before the end of twenty-one years from the date of the mortgage deed.

The extreme hardship of several cases similar to that of Christian v. Goldie bringing the defective state of the law prominently before the public, an Act was passed in 1835 which repealed the Act of Settlement so far as it confined the redemption of mortgaged lands to 21 years, and which provided that at the expiration of 21 years from the date of any mortgage it should be lawful for the mortgagee to sue out execution in the Deemster's Court or in case of the mortgagor being off the Island, in the Court of Chancery for the principal interest, costs and charges due on such mortgage, and by virtue of such execution to cause the houses, lands, and hereditaments mortgaged of whatever description, the same might be or a sufficient part thereof to be sold for the purpose of paying the amount of such execution, the surplus to be paid over for the benefit of the mortgagor, &c.

The remedy provided by this Act not being available until the expiration of 21 years, and this being by no means a satisfactory state of things, [61] an alteration in the form of mortgage deeds has been introduced in order to afford a remedy more speedy, but in other respects similar to that created by the Act referred to. The form of mortgage deed now usual is an instrument called a bond and security. In form it is a personal bond for the money borrowed and interest, with a mortgage or security added to it, stating in substance that for the better security of the mortgagee in the payment of the amount of the bond, the mortgagor grants and conveys the lands described to hold to the mortgagee, his executors, &c., in security until payment. The deed contains no clause to enable the mortgagor to retain possession until default, but as almost all securities con tain an agreement that the principal shall not be demandable until the expiration of a certain notice, and that the interest shaH be payable at fixed periods annually or otherwise, as agreed upon, it is held in practice that the effect of this agreement is to entitle the Mortgagor to retain possession until default be made by him in payment of principal or interest according to the terms fixed by the deed. Of course his legal position in so holding is that of tenant to the mortgagee (see Broadbent v. Skillicorn, and reasons of Chancery Court in Christian v. Goldie.) In case the lands granted in security are lands of inheritance not liable to be taken in execution for debt, a clause of sale is generally inserted to the effect that in default of payment in terms of the deed, it shall be lawful for the mortgagee on such default to sue out execution in a competent Court, and thereunder to cause the lands to be attached and sold by the [62] officer of the law enforcing such execution in the same manner as if the same were chattels. [note 7]

The remedies under a bond and security are much more extensive than under a simple mortgage. In the first place, under a bond and security the mortgagee may pursue his remedy against the persons and general estate of the mortgagor under the bond as any common creditor may do, and at the same time may under the security take advantage of all remedies against the lands mortgaged, which as mortgagee he may be entitled to. As against the person and general estate of the debtor he is not entitled to rank above common creditors, as by the law of the Island specialty debts are not entitled to any priority of payment above simple contract debts, the only debts entitled to preference being landlord's rent to the extent of one year's rent and servant's wages. In case the mortgaged premises are lands of inheritance, not liable to be taken in execution for debts, and in case no clause of sale be contained in the deed, the only remedy under a bond and security against the lands mortgaged in case of default, is an order of possession obtainable in the Deemster's Summary Court, [note 8] and in case the principal interest and costs are not paid off before the expiration of 21 years from the date of the deed, the mortgagee is, under the Statute of 1835, but not [63] before then, entitled to obtain execution and sell the lands in terms of that Act. If the deed contains a clause of sale, execution may be obtained at any time after default in terms of the clause of sale and may be at once enforced against such inheritance lands (see case of Dr Garrett, in which it was held by the Staff of Government that a sale of such inheritance lands, not otherwise liable to be taken in execution, made by the Coroner under execution for the amount of a bond and security containing such a clause of sale was good). The remedy therefore given by a clause of sale is much more satisfactory than the remedy created by the Statute.

In case the lands are of a description liable to be taken in execution for debt, the mortgagee under a bond and security, with or without a clause of sale, may in case of default at any time obtain either an order of possession under the mortgage part of the deed, or an execution for the amount of the bond, and thereunder sell, by the officer of the law enforcing such execution, either the debtor's general estate or the lands granted in security, or both, if necessary to discharge his claim. This remedy against the lands mortgaged arises upon the bond only as in case of a common mortgage without a personal bond being added, the only remedy against the lands whether liable to be taken in execution for debt or not is as before stated an order of possession and a right to obtain execution against the lands at the expiration of 21 years, in terms of the Statute of 1835. In the distribution of the proceeds of the sale of the mortgaged lands under an execution for the amount of a bond and security, the mortgagee [64] is entitled to priority of payment as against subsequent mortgagees and general creditors, although the sale is effected under a judgment on the bond which in itself (if no security were attached), would not confer any preference.

So long as the mortgaged lands continue to be the property of the original mortgagor there does not appear to be any very great anomaly in the mortgagee obtaining judgment against him on his bond, and selling the lands in themanner before stated, but in cases where the mortgagor has parted with his interest in the lands by sale or otherwise, it will occur to the professional reader that a difficulty may arise in obtaining the same remedies. In theory it seems pretty clear that the mortgagee is not entitled to any remedy whatever against a purchaser under the bond, which is a mere personal obligation of the original mortgagor, and that his remedy against the lands in the hands of such purchaser can only be under the mortgage or security. This remedy as already stated, is confined to an order of possesion and an execution for sale at the end of 21 years. On principle, therefore, there does not appear to be any other legal means of obtaining payment. However, a practice has been introduced (on what grounds it was justified originally the writer cannot conceive), and is now sanctioned by long use and decisions of the courts, whereby it is held that the mortgagee may obtain execution against the purchaser for the amount of the bond and security limited to be enforced against the mortgaged lands only, and may enforce it against them by sale if [65] the lands are liable to execution for debt. If the lands are not so liable, such execution cannot be obtained (except at the end of 21 years) unless the deed contains a clause of sale, in which case it will be granted. Although nothing can appear more anomalous than such a practice, it may be considered to be now so established by the Insular Courts that even a Court of Appeal would hesitate to decide against it on the ground of its original irregularity. In Lamothe v. Teare [note 9] the legality of the practice was questioned. It was however, sanctioned by the Staff of Government on appeal. In Hunt v. Okell it was questioned before Deemster Drinkwater who decided in accordance with the former decisions. [note 10]

From the foregoing observations it will appear that an analysis of a modern Manx deed of mort- [66] gage, or bond and security, shows it to be simply a personal bond with a grant of real estate for a term of years expiring on payment, and that this term may by sale under the Statute at the end of 21 years, or by sale at any time after default if the mortgaged lands are liable to debt, or if not by sale in pursuance of a clause of sale, be converted into a fee simple estate in the purchaser. In consequence of the fee simple not being conveyed to the mortgagee as before stated upon the mortgage or bond and security being paid off, no re-conveyance is necessary. Upon payment the mortgage or bond and security expires of itself, and a simple receipt certifying the payment is all that is requisite to discharge the eztate. In practice this receipt, after being attested, [note 11] is generally annexed to the original security upon the record or registry by the Registrar of Deeds, who makes a memorandum on the original stating that it is cancelled by him by virtue of the receipt.

For the same reason in suits respecting mortgages the heir at law of the mortgagee taking no interest even at law in the mortgaged premises, is not considered a necessary party.

If subsequent mortgages are granted by the mortgagor, and it is doubtful whether the lands if sold will be sufficient to discharge them, it appears clear to the writer that to make the title of the purchaser good as against them, and to deprive [67] them of their right to redeem the prior mortgage, they should be made parties to the judgment under which it is intended to sell the lands. The sale cannot be effected under the preceding mortgage without the assistance of the judgment of the Court, and such judgment or proceedings under it cannot in accordance with principle be held to be binding upon persons not parties to it, and perhaps unaware of its very existence. If made defendants, the subsequent mortgagees have an opportunity of testing the correctness of the claim and of demanding proof that all preliminaries such as notice, &c., have been complied with. By the Statute of 1835 the execution to be granted under it must be had against the mortgagor or persons entitled to the equity of redemption or reversion. Subsequent mortgagees are persons so entitled to the extent of their several charges, in fact their claims are paramount to any claim of the mortgagor whose interest may be merely nominal, consequently it should appear that they should be parties to the judgment, if they are to be bound by it.

The matter seems so clear that the writer feels that the reader may be surprised at his treating it as if it could be doubted. It is, however, sometimes neglected in practice, and the writer I Las heard it deliberately argued that the mere sale by a mortgagee under an execution against the mortgagor only is sufficient to bar the subsequent [68] mortgages. [note 12] The legal position of a mortgagor remaining in possession after having granted a Manx mortgage or bond and security is in respect of such possession during the mortgage that of tenant to the mortgagee (see statement of reasons of Chancery Court in Christian v. Goldie), liable to be ejected on any default. Not being able to create any interest greater than his own, he is consequently unable to grant a lease binding on the mortgagee. In case of default the mortgagee by taking proceedings for possession or for execution against the mortgagor and making the tenant under him a party, can eject such tenant and either possess or sell the lands.

In the case of Broadbent v. Skillicorn and others, the suit was brought against the mortgagor, the subsequent mortgagees and the tenant in possession who held under lease granted subsequent to the date of plaintiff's mortgage, to obtain execution against them for amount of bond and security with power of sale, but limited to be enforced against the estate of Sulby, the lands mortgaged.

[69] Deemster Drinkwater (July 20th,. 1851) held that the mortgagee could eject the tenant at any time according to the principle laid down in Keesh v. Hal1, 21 Doug and that the plaintiff was therefore entitled to execution to be enforced against the estate, which must be sold free from the lease. (See similiar decision in Hunt v. Okell and Corlett by Deemster Drinkwater, April 1859.) [note 13]

In case of the death of the mortgagor although a modern Manx security is in form a personal obligation with a charge on the land to secure its payment, yet as between the heir or devisee and the executor or administrator of the mortgagor, the land by the universal practice of the Courts of the Island is held to be primarily liable, and if the amount of the security should be recovered by the mortgagee out of the personal estate under the bond, the personal representation would be entitled to be reimbursed out of the lands (so decided in case of estate of Captain Kelly of Knockham in Bal1augh). [note 14]

It has been decided, under the Act of 1835, that in case the owner of the reversion or equity of redemption resides in the Island, the only Court [70] having power to grant execution at the end of 21 years.; in terms of the Act, is the Deemster's Courl, and no exception is made in case such owner is an infant. In Christian v. Kelly and others, a bill filed in Chancery under such circumstances, and claiming jurisdiction on the ground of defendant's infancy, was demurred to and dismissed. In the case of — v. Moore (Hills) the same construction was given to the Act by the Staff of Government.

A bond, if made payable to the obligee and his assigns, is assignable by the law of the Island, but is not so at law if the word "assigns" or an equivalent word does not appear in the deed. [note 15] Consequently it was held in the case of Guinness v. Moore, Baljean, that in the case of a bond and security not payable to assigns, an assignment did not operate to transfer the personal obligation except in equity, but that such assignment operated to transfer the security or mortgage at law. The assignee was, therefore, held not entitled at law to have any remedy against the mortgaged lands under the bond, although he might have any remedy at law which he was entitled to under the mortgage. A similar decision was made in the case of Stuttard v. Christian. By the before mentioned Act of Settlement all deeds of mortgage were required to be recorded within six months [71] after date, otherwise to be of no effect in law. This Act was repealed by the Registration Act of 1847, which limits no time for the recording but gives priority to all mortgages from the date of their registration, and not of their actual execution. Equitable mortgages, by deposit of title deeds, are virtually unknown in the Island, as the universal practice of recording the original title deeds, in terms of the Act of Settlement, makes such a mode of creating charges on lands impracticable.

Although the Manx form of mortgage may appear strange and unsatisfactory to Englishmen who are accustomed to realise their mortgages out of the mortgaged estate without the necessity of taking any legal proceedings to enable them to do so, it nevertheless appears to give satisfaction to the people of the Island, as there are no complaints against it, and no attempts either by legislation or by an alteration of the forms of conveyancing are made to introduce any other system.

The Courts of the Island affording a summary remedy to parties, the mortgagee finds little difficulty in obtaining the necessary judgment, and the notices and forms necessary to be observed in the sale of lands by the officer enforcing the judgment are considered to afford a protection to the mortgagor from an unfair or fraudulent sale, and at the same time a sale by him relieves the mortgagee from the duties and liabilities attending the execution of a power of sale, and the disposal of the surplus proceeds.

For Sherwood's notes on this chapter see Appendix 1.

Note 1: There had been in recent years some cases where the English form of Mortgage has been adopted, but it is not much in favour in the Island. A Manx Mortgage created a charge on the mortgaged property without a conveyance or transfer of the legal estate to the Mortgagee.

Note 2: Revised Statutes, Vol. I, p. 164.

Note 3: II Moore's P.C. Reports, p. 226.

Note 4: (1830) Chancery No. 79

Note 5: Rolls Office Chancery File (1830) No. 79.

Note 6: Rolls Office Chancery File (1816) No. 206.

Note 7: That legal effect could be given to such a clause of sale was frequently much questioned, by reason of its being attempt to confer jurisdiction on the Court from which the execution issued, or on the officer enforcing it.

Note 8: The order of possession referred to is one obtainable at any time if interest be in arrear, and it entitles the mortgagee to hold the mortgaged property until by means of the rents, the principal interest, costs and charges be discharged.

Note 9: Advocate's Note Book, p. 226.

Note 10: The argument in favor of the anomalous practice referred to in the text, may be thus briefly stated:mdash; A deed of bond and security combines a personal bond of the obligor or mortgagor, and a mortgage of real estate to secure the payment of the bond. So far therefore as the real estate is liable to be sold for debt, the mortgagee has granted to him by the deed the right to realize the amount due under the bond at any time when such amount may be payable, by a judicial sale of the mortgaged property — a right of which he would be deprived by the act of the mortgagor, if when the mortgagor ceases to be the owner of the property, the mortgage is converted, as it were, into a pure mortgage, that is. one for the payment of which there is no personal bond or covenant of the mortgagor. The Courts have held that the liability to a sale continues to attach to the mortgaged property notwithstanding that it has ceased to belong to the obligor and mortgagor. There used to be another objection, to which Mr Sherwood has not alluded, namely, as to procedure to obtain a judicial sale — whether in the Deemster's Court or the Court of Chancery. The mortgagor as obligor of the bond could be sued in the Deemster's Court as for debt, ahd whilst he continued to be the owner of the mortgaged property, a sale of it could be effected under the judgment for the debt, but when he ceased to be such owner the Defendant would as to the property be the owner who was not personally liable. The suit therefore would be one to enforce payment of a charge on the property only — a remedy of equitable jurisdiction appertaining to the Chancery Court only. The present practice however of suing in the Deemster's Court has been continued too long to be now questioned.

Note 11: Or captioned — the old technical expression.

Note 12: The practice so ably condemned in the text is not without some foundation, it being considered as having arisen from the effect of sec. 5 of the Act of Settlement of 1704 (see p. 49 ante), by which, if a mortgage was not redeemed within 21 years from its date, the mortgaged property, without notice to the mortgagor or subsequent mortgagees became automatically the absolute property of the mortgagee. When therefore by the Act of 1835 a mortgagee had on the expiry of the 21 years to obtain a judgment for the sale of the mortgaged property, it was not deemed necessary to make as parties to the suit subsequent mortgagees, who appear to have had no consideration shown to them by the Act of Settlement. However although it is not necessary to make subsequent mortgagees parties to the suit in the first instance, there are cases where under special circumstances the Court has required notice to be given to them. The practice condemned by the learned author, can hardly now be rescinded without recourse to legislation.

Note 13: The mortgaged property is not sold free from the lease, unless the lessee be a party to the suit, and in cases where the lessee is a party the leaning of the Courts has been to order a sale subject to the lease, if the mortgagee's interest is not thereby prejudiced.

Note 14: It is very probable that the practice referred to in the text originated by carelessness after the introduction of deeds of bond and security. Previously when no personal bond of the mortgagor was given, the deed was a pure mortgage, chargeable only on the mortgaged property, which of course was alone answerable for the amount due. In the case of a bond and security, the bond, — a personal obligation of the mortgagor, is in a manner the primary part of the deed, — not the mortgage, which (as usually expressed in the deed) is given for "better security" merely. The form of the deed seems to have been overlooked.

Note 15: But see provision as to the assignment of debts and choses in action in the Isle of Man Judicature Act, 1883, sec. 14 (5). (5 Revised Statutes, p. 230).