INTRODUCTION

This paper will discus the case of Santley v Wilde which is said to be a key case to the law of
mortgages. It will also look at its importance to law of mortgage in terms of its definition, in
terms of certain principles that came out so strongly in this case and how they affect the law of
mortgage. How each principle in the is applied.

The case of Santley v Wilde1 the facts are that the owner of a lease of a theatre wanted to carry
on a theatre business there and took out a mortgage of £20,0001 in order to do this, secured
against the lease, over five years. The mortgage also required that she also paid one third of the
net profits to the lender until the end of the mortgage term. And the issue before the court was
whether the term regarding sharing profits as demanded by the mortgagee was a ‘clog’ or not.
And the court in passing the judgement Lord Lindley said a mortgage is a conveyance of land or
an assignment of chattels as a security for the payment of a debt, or the discharge of some other
obligation for which it is given. This is the idea of a mortgage; and the security is redeemable on
the payment or discharge of such debt or obligation, any provision to the contrary
notwithstanding. That, in my opinion, is the law. Any provision inserted to prevent redemption
on payment or performance of the debt or obligation for which the security was given is what is
meant by a clog or fetter on the equity of redemption, and is therefore void. It follows from this
that ‘once a mortgage always a mortgage,’ but I do not understand that this principle involves the
further proposition that the amount or nature of the further debt or obligation, the payment or
performance of which is to be secured, is a clog or fetter within the rule.’

In this case three doctrines were highlighted and these include; first, once a mortgage always a
mortgage. Second, the mortgagor shall not receive to himself any collateral advantage outside
the mortgage contract and third, the provision or stipulation which have the effect of clogging or
fettering the equity of redemption is void.2

The doctrine of ‘Once a mortgage always a mortgage’ means that the mortgage shall not make
any stipulations which will prevent a mortgagor, who has paid principle, interests and costs from
getting back his mortgaged property in the condition in which he parted with it.3 the second
1
Santley v Wilde [1899] 2 Ch 474
2
Noakes and co. ltd v Rice [1902] AC 24, (per Lord Davey)
3
Martin D, (2012) Modern land law: The equity of redemption 8 th edition pages 406-7; by Routledge 2 Park Square,
Milton Park, Abingdon, Oxon OX14 4RN
doctrine means that (according to Lord Davey)4 a mortgage cannot be irredeemable, and that a
provision to that effect is void. In the case of the Salt v Marquis of Northampton5 the question
was whether a certain life policy, the premiums on which were charged against the mortgagor,
was comprised in the mortgage security. The question having been decided in the affirmative, it
was declared to be redeemable, notwithstanding an express provision to the contrary contained in
the deed. he continued explaining the meaning of the second doctrine when he said that the
doctrine was developed a long time ago in the court of equity which went beyond the usury laws,
and set its face against every transaction which tended to usury. It therefore declared void every
stipulation by a mortgage for a collateral advantage which made his total remuneration for the
loan to indirectly exceed the legal interest.

Lord Lindley MR6 said something about a clog or fetter and he said that: ‘a clog or fetter is
something which is inconsistent with the idea of security; a clog or fetter is in the nature of a
repugnant condition.’ What this means is that, once a mortgage has been executed any separate
and independent transaction giving an option to purchase may be valid provided it does not
defacto form part of the mortgage.7

The rights of the Mortgagor; The dual nature of a mortgage as a contract and as an interest in
land means that the mortgagor has rights arising under the contract of loan and from the
protection which a court of equity offers a mortgagor due to the proprietary interest they retain in
their property.8

The Contractual Right to Redeem; Once a mortgage has been created there will normally be a
contractual date set for repayment of the loan; this is known as the legal redemption date. At
common law if the monies were not repaid on the legal redemption date, the property vested in
the mortgagee. This was unfair and so equity intervened and created the equitable right to
redeem i.e. it gave the mortgagor the right to redeem the property even after the legal redemption
date had passed.9

4
Noakes and co. ltd v Rice [1902] AC 24
5
Salt v Marquis of Northampton
6
Noakes and co. ltd v Rice [1902] AC 24
7
Reeve v. Lisle [1902] AC 461.
8
Dixon, M, supra note 3 p. 225
9
Hayton, D, supra note 8 page 462- see also speech of Viscount Haldane LC in G and C Kreglinger V. New Patagonia
Meat and Cold Storage Company, Limited [1913] AC 25.
The equitable right to redeem; Equity allowed the mortgagor an equitable right to redeem on any
date after the date fixed for redemption. Equity took the view that the property mortgaged was
merely a security for the money lent and that it was unjust that the mortgagor should lose his
property because he was late in repaying his loan10. Equity compelled the mortgagee to reconvey
the property to the mortgagor on payment of the principal with interest and cost even if the legal
date of redemption had passed.11 In Salt v Marques of Northampton, Lord Bramwell
described the equitable right to redeem thus: it is a right not given by the terms of the agreement
between the parties to it, but contrary to them, to have back securities given by a borrower to a
lender, I suppose one may say by a debtor to creditor, on payment of principal and interest at a
day after that appointed for payment when by the terms of the agreement between the parties the
securities were to be the absolute property of the creditor.12

On the other hand, until the legal date of redemption had passed, it could not be said that the
mortgagor was in default; no matter how unlikely it was that repayment would be forthcoming,
no matter how much the property might deteriorate in the meantime, the mortgagee could not
realize his security until the legal date of redemption had come and gone. As long as the legal
date of redemption remained a meaningful date, it had to be set far enough in the future to give
the borrower a realistic opportunity of repaying. However, when Equity began to say that the
borrower was not prejudiced by the passing of the legal date of redemption, then it ceased to
matter, from his point of view, whether the legal date of redemption was long or short. But, for
the reasons given, from the lender’s point of view it was a case of the shorter the better, and so,
by convention, the legal date for repayment became six months from the date of the loan.13

The Equity of Redemption. The equity of redemption represents the sum total of the mortgagor’s
rights (in equity) in the property which is subject to the mortgage. The equity of redemption is
the mortgagor’s right of ownership of the property subject to the mortgage,14 and is an interest in
land which can be dealt with like any other interest in land.15

10
Ibid
11
Ibid
12
[1892] A.C 1, at P.18
13
Perrins, B (2000) understanding land law third edition. by Cavendish Publishing Limited, The Glass House,
Wharton Street, London, United Kingdom
14
Re Wells [1933] CH 29 at P. 52.
15
Hayton, D. supra note 8, at page 463.
The equity of redemption differs from the equitable right to redeem in that the latter does not
exist until the legal date of redemption is past, whereas the equity of redemption exists as soon as
the mortgage is made.16 The equitable right to redeem is one of the adjuncts of the equity of
redemption17.

Equitable Principles Applicable to Mortgage Transactions. In G and C Kreglinger and New

Patagonia Meat and Cold Storage Company, Limited18, Lord Parker attempted to sum up the
equitable principles applicable to mortgage transactions. His Lordships observed and commented
thus: My Lords, I desire, in connection with what I have just said, to add a few words on the
maxims in which attempts have been made to sum up the equitable principles applicable to
mortgage transactions. I refer to the maxims, “once a mortgage, always a mortgage,” or “A
mortgage cannot be made irredeemable.19 Long ago the mortgagor was to lose his property if he
doesn’t pay back the loan on time. Obviously, here was great opportunity for abuse and
unfairness. In consequence, the court of equity, acting under the maxim ‘once a mortgage,
always a mortgage’, blotted out the unfair act.20 This became known as the ‘equitable right to
redeem’.

CONCLUSION

In concluding this paper one can see that the case of Santley v Wilde clearly has shown that it is
an important case to the law of mortgages. It is important in that it has brought or affirmed the
facts that once a mortgage has been gotten the owner has the right to reclaim it so long as they
repay the loan, interests and other costs. It provides the rights for both the mortgagor and the
mortgagee. That is the right of reclaim on the part of the mortgagor and the right to possess the
mortgage if the mortgagor fails to owner their obligations. Thus, equality is promoted.

BIBLIOGRAPHY

BOOKS

Hayton, D, supra note 8 page 462

16
G and C Kreglinger and New Patagonia Meat and Cold Storage Company, Limited [1913] AC 25.
17
Dixon, M. supra note 3
18
[1913] AC 25 at page 53.
19
Noakes and co. ltd v Rice [1902] AC 24, (per Lord Davey)
20
Thornborough v. Baker (1675) 2 Swans 628, 630, 36 Eng. Rep 1000
Perrins, B (2000) understanding land law third edition. by Cavendish Publishing Limited, The
Glass House, Wharton Street, London, United Kingdom

Dixon, M, supra note 3 p. 225

CASES

G and C Kreglinger and New Patagonia Meat and Cold Storage Company, Limited [1913] AC
25

Noakes and co. ltd v Rice [1902] AC 24, (per Lord Davey)

Thornborough v. Baker (1675) 2 Swans 628, 630, 36

Re Wells [1933] CH 29 at P. 52

Reeve v. Lisle [1902] AC 461

OTHER SOURCES

McFarlane B, Hopkins N, and Nield S, (2009) Land law: text, cases and material 2nd edition
by Ashford Colour Press Ltd, Gosport, Hampshire Great Clarendon Street, Oxford, OX2 6DP,
United Kingdom.

Goo S, (2002) sourcebook on land law Third Edition. By Cavendish Publishing Limited, The
Glass House, Wharton Street, London WC1X 9PX, United Kingdom

Dixon M, (2002) Principles of Land Law 4th Edition. By Cavendish Publishing Limited, The
Glass House, Wharton Street, London WC1X 9PX, United Kingdom

Smith J, R (2007) introduction to land law. Printed and bound in Great Britain by Henry Ling
Ltd, Dorchester, Dorset
 ROCKVIEW
UNIVERSITY

SCHOOL OF LAW

STUDENT: RICHARD MUTAKILA

STUDENT ID: 18400663
PROGRAMME: BARCHELORS OF LAW
COURSE: LAND LAW
LECTURER: MR. MBEWE
INTAKE: JUNE I8
YEAR: TWO
TERM: TWO
Assignment No. TWO
DEAD LINE: 29TH, OCTOBER, 2019.
QUESTION: