Page:Halsbury Laws of England v1 1907.pdf/854

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Bankers and Banking.

632

Sect. 18.

Sect. 18.

Securities

Securities for Advances.

Sub-Sect.

1.

Legal Mortgages.

for

Advances.

1275. In the case

of a banker taking a legal mortgage (m) there nothing in his position differing from that of any other mortgagee. The taking, however, of a legal mortgage for a definite amount terminates the relation of banker and customer as to that amount. The banker's lien would not operate by virtue of it, as the effect is to constitute a loan account to be kept distinct from current account, and any incidents arising from previous acquiescence in a system of dealing with it, such as charging interest thereon with periodical rests, would come to an end. Where a mortgage, however, is taken to secure a floating balance, this is not the case, as the relation of banker and customer still continues (n). A banker holding a mortgage of any sort must not advance further moneys upon it after notice of assignment of or further charge on the equity of redemption (o), even where the banker's assignment, though in fact by way of security only, purports to be absolute (p). Any such subsequent advances will be postponed to the later charge of which the banker had notice. Nor does the fact that the banker had agreed to make advances on the security up to a limit which was not reached at the time he had notice of the subsequent charge or assignment affect this rule. The agreement being to make the further advances on the security of the property as it then stood, the mortgagor, having by his own act deprived himself of the power to give the stipulated security, Specific percould not proceed against the banker for damages (^). formance will not be decreed of an agreement for a loan(r). If the banker makes the further advances, he acts voluntarily, and cannot claim priority over the subsequent charge or assignment (r). is

Effect of

mortgage.

advances.

Sub-Sect.

Change parties.

of

2.

EqultaUe Mortgages.

1276. If securities are deposited with an unincorporated organisation, e.g., a private bank, for advances made by them, any change in the constitution of that organisation, e.g., the retirement of one partner and admission of another, would render the securities useless as cover for future advances {s). So a security may cease to be effectual as cover for future advances by reason of a change in the personality of the borrower, e.g., change in the constitution of the firm originally depositing {t) As to registra(m) For the general law of legal mortgage, see title Mortgage. tion nnder the Land Transfer Acts, see title Real Property and Chattels Real. As to remedy by foreclosure or sale, see title Mortgage. For forms of legal mortgage, see Encyclopeeclia of Forms, Vol. VIII., pp. 443, 661 et seq. (n) See p. 631, ante, and note {I), ibid. (o) Hoi^kinson. v. Roll (1861), 9 H. L. Cas. 514 Union Bank oj Scotland v. National Bank of Scotland (1886), 12 App. Cas. 53. {jp) Union Bank of Scotland v. National Bank of Scotland, supra. {q) West V. WilUams, [1899] 1 Ch. 132, particularly 'per Lindley, M.R., at p. 143, and Chitty, L.J., at p. 146. (r) South African Territories, Ltd. v. Wallington, [1898] A. C. 309 Larios v. Gurety (1873), L. R. 5 P. C. 346. (s) Ex parte Kensington (1813), 2 Ves. & B. 79, 83 and see title Partnership. (t) Bank of Scotland v. Christie (1,840), 8 Cl. & F. 214 ; Ex parte MacKenna